Seasonal demand pick-up to support Asia TiO2 prices in Q3

Focus story by Alexis Gan

SINGAPORE (ICIS)–A seasonal pick-up in demand for titanium dioxide (TiO2) in Asia will provide firm support to the product’s market prices for the rest of the third quarter, industry sources said on Wednesday.

Sellers are cautiously positive over the TiO2 market, hoping prices can continue to increase after a $30-50/tonne gain for third-quarter deliveries, depending on grades, volumes and applications.

On 25 July, TiO2 prices were assessed at $2,600-3,000/tonne CFR (cost and freight) Asia, with prices at the lower end of the range reflecting materials for paint and coating sectors, while those in the second-largest sector of plastic, ink or printing were mostly at around the higher end.

The gains last week were a turning point for the market, possibly indicating that prices will no longer fall as they had done in the past two years, according to producers.

Over the past few months, producers have initiated price hikes for TiO2, timing the increase to the seasonal improvement in demand. But the push for higher prices was capped by availability of lower-priced products for certain grades and applications.

Meanwhile, cooling measures in the property sectors implemented in China and in some southeast Asian countries were affecting TiO2 demand from the architectural painting and plastic sectors.

The paints sector accounts for 50-55% of the total TiO2 pigment consumption, while the share of the plastics sector is around 15%, industry sources said.

Demand for TiO2 typically increases from August to November as production at downstream sectors traditionally strengthens ahead of winter.

Consumption from ink, printing, plastic and appliance coating sectors is expected to be higher after the Eid-ul-Fitr holiday – which is observed in most parts of Middle East and in some parts of Asia –  and after monsoon period in other countries such as Thailand or India.

Eid-ul-Fitr, which is a celebration marking the end of the Muslim fasting month of Ramadan, falls on 28 July this year.

Sentiment in the TiO2 market also got a boost from better economic data coming out of China, India and Indonesia, market sources said.

Meanwhile, strong growths exhibited by the automotive sectors of some southeast Asian countries also stoked confidence for better TiO2 consumption in vehicle coatings.

Data from the ASEAN (Association of Southeast Asian Nations) Federation showed motor vehicle production in Philippines grew 23.6 % in May from April, and up 22.4% year on year, while in Vietnam, the growth was 20.1% month on month and 19.6% year on year.

Vehicles sales volumes on a month-on-month basis were also encouraging in May – higher by 18.4% in Philippines, and by 39.5% in Vietnam.

Separately, the Malaysia’s Automotive Association (MAA) announced that June vehicle sales in the country grew 9.2%  month on month.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections