Price and market trends: Europe titanium dioxide buyers predict Q3 price increases will fail

14 June 2013 09:29  [Source: ICB]

Customers claim market is long and supply plentiful, as producers target contract hikes

Recent price increase initiatives for the third quarter by major titanium dioxide (TiO2) producers will fail because the market is still on the long side and supply is plentiful, European TiO2 ­buyers said on 7 June.

Tronox and DuPont are ­targeting €0.125-0.152/kg ($0.165-$0.20/kg) increases and a third major TiO2 maker said it will target at least €0.15-0.16/kg to ­improve margins.

However, buyers thought these targets were too ambitious and not all producers are so keen to sacrifice volumes to achieve ­higher prices, so they will most likely roll prices over in the third quarter. If sellers cannot ­implement their targets now, in the fourth quarter it will be near ­impossible as that is the quietest period for TiO2 sales, so in effect it is the only chance for TiO2 ­sellers to raise prices in 2013, sources said. Negotiations have not yet ­officially started, but most buyers expect a rollover, or a very minor increase, depending on starting point.

Sellers will target increases no matter what, although one source admitted that negotiations might turn out to be tougher than usual. Two producers said that sales have improved and they will do everything they can to increase prices, but the outcome of the negotiations will mostly depend on how many alternatives buyers have to shop around and reject higher price offers.

By: Janos Gal
+44 208 652 3214

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