World markets are in recovery. But prices are still struggling and must improve if badly needed capacity is to be built
Titanium dioxide (TiO2) is used as a pigment to provide brightness, whiteness and opacity to paints and coatings, plastics, paper, inks, fibres, food and cosmetics. The largest consumer is paints followed by plastics and then paper, with the remainder used in speciality applications. It is available in two forms: anatase and rutile.
The market started to recover mid-year after a poor first half, which was impacted by the Iraq war and the outbreak of severe acute respiratory syndrome (Sars). Most players estimate global demand will have shrunk this year by 3-5%, although others are predicting flat demand or a more marginal decline.
Asian demand is running well, led mainly by China. In the US, consumption is strengthening after a poor coatings season and there are positive signs of a pickup in the economy. In Europe, destocking and poor economic conditions led to a disappointing first half with players also fighting for market share. However, demand has now improved. Producers report record sales for October, with November volumes also looking good and inventories being reduced.
Europe has the highest prices in the world because of the strength of the euro. Numbers are in the range €2000-2200/tonne. Producers announced a €150/tonne rise for quarter two, but managed to gain only half or less of this which they then lost in quarter four when prices dipped by €50-60/tonne. Another €100/tonne hike has been announced from 1 November and producers hope this will be fully implemented by early next year. In the US, prices are about $1900/tonne and in Asia are about $1950/tonne.
Margins remain insufficient and prices have been below reinvestment levels for several years. Levels need to get up to at least $2500/tonne to justify brownfield investment.
TiO2 is produced from either ilmenite, rutile or titanium slag. Titanium pigment is extracted by using either sulphuric acid (sulphate process) or chlorine (chloride route). The sulphate route uses simpler technology than the chloride route and can use lower grade, cheaper ores. But, it generally has higher production costs and with acid treatment is more expensive to build than a chloride plant, although the latter may also need a chlor-alkali unit.
Chloride technology produces a purer product with a tighter range of particle size, but anatase pigments can only be produced by the sulphate route. Over half of world production is estimated to use the chloride process.
Producers are predicting a strong recovery and a tight market in 2004. Players say supply must increase as capacity is growing much less than demand. World demand growth is rated at an annual 2-3%.
However, any major investment remains unlikely while prices are still so low. A new plant is expected to be built in Asia, and particularly China, where growth rates of up to 10%/year are forecast. However, players believe a worldscale plant is unlikely in the short term.
There is still some room for capacity creep over the next two to three years, although some sources believe that debottlenecking is close to its limit. Global capacity now stands at 4.5m tonne/year. Huntsman Tioxide still plans to upgrade at Huelva, Spain, to about 96 000 tonne/year once the market improves. Kronos says it can add another 30 000 tonne/year to its global capacity over the next three to four years. Kemira’s 10 000 tonne/year expansion in Pori, Finland, is due to complete next month and the company is also studying a further debottlenecking of 20 000 tonne/year.
Major global titanium dioxide capacity, '000 tonne/year
|Yanbu, Saudi Arabia||74 C|
|Altamira, Mexico||125 C|
|DeLisle, Mississippi, US||300 C|
|Edge Moor, Delaware, US||155 C|
|Kwan Yin, Taiwan||90 C|
|New Johnsonville, Tennessee, US||330 C|
|Jurong, Singapore||45 C|
|Yokkaichi, Japan||92 S|
|Yokkaichi, Japan||68 C|
|Pori, Finland||120 S|
|Botlek, Netherlands||56 C|
|Hamilton, Mississippi, US||145 C|
|Savannah, Georgia, US||54 S|
|Savannah, Georgia, US||91 C|
|Uerdingen, Germany||105 S|
|Ghent, Belgium||69 C|
|Frederikstad, Norway||30 S|
|Leverkusen, Germany||127 C|
|Leverkusen, Germany||30 S|
|Nordenham, Germany||60 S|
|Varennes, Quebec, Canada||65 C|
|Varennes, Quebec, Canada||16 S|
|Lake Charles, Louisiana, US||135 C|
|Ashtabula, Ohio, US||110 C|
|Baltimore, Maryland, US||50 C|
|Kemerton, Australia||95 C|
|Le Havre, France||95 S|
|Salvador, Brazil||60 S|
|Stallingborough, UK||150 C|
|Thann, France||30 S|
|Duisburg, Germany||90 S|
|Calais, France||100 S|
|Greatham, UK||100 C|
|Grimsby, UK||80 S|
|Huelva, Spain||75 S|
|Scarlino, Italy||80 S|
|Teluk Kalung, Malaysia||56 S|
|Umbogintwini, South Africa||40 S|
|Kwinana, Australia||95 C|
Process: S=sulphate, C=chloride