08 August 2013 19:35 [Source: ICIS news]
HOUSTON (ICIS)--US titanium dioxide (TiO2) producer Tronox said on Thursday that its second-half pigment inventories will continue to drift downward to more normal levels after dropping by 11 days during the second quarter.
The company reported that at the end of the second quarter, its finished-pigment inventories had dropped to 60.5 days from 71 days at the same time in the previous quarter.
“We anticipate that pigment demand will continue to remain strong and that our finished pigment inventories will stabilise,” CEO Tom Casey said during an earnings call.
The company also said it had “modestly” increased its pigment-plant utilisation rates during the quarter and only hinted that operating rates might reach the upper 80% range by year’s end if inventories get closer to 50 days’ supply.
However, the company reported a second-quarter 2013 net loss of $13m (€9.8m) as costs grew faster than sales.
Although Casey said the company also believes TiO2 prices will increase late in the fourth quarter, he emphasised that Tronox is not providing “guidance on anything but pigment volumes, which we expect to be modestly up in the third quarter”.
One analyst asked Casey why Tronox was optimistic about volumes and price, given current inventory levels and typical market weakness during the fourth quarter.
“We think demand is back,” Casey said.
The company also benefited in the second quarter by internally sourcing its feedstock, Casey said. Tronox’s acquisition of Exxaro Resources Ltd's mineral sands business in the second quarter of 2012 made Tronox the world's largest fully integrated producer of titanium ore and TiO2.
($1 = €0.75)
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