Europe Q3 TiO2 contracts settle down in first quarterly fall for over two years

Source: ICIS News

2018/08/10

LONDON (ICIS)--European titanium dioxide (TiO2) Q3 contract prices have settled lower on supply relief, marking the first quarterly reduction for more than two years, sources on Friday.

Contracts were mostly agreed with double-digit reductions after a prolonged trend of price hikes since April 2016, due to market tightness which has now eased.

Availability in Europe has improved because of a combination of increasing imports from China and lower demand over recent months.

Decreases around €50/tonne were typical for standard paints grade TiO2  in and also for other grades in some cases.

In terms of actual numbers, prices were mainly quoted around €2,800/tonne FD (free delivered) and slightly above €3,000/tonne FD in northwest Europe for standard paints grade TiO2.

European contract prices were assessed in the third quarter at €2.80-3.04/kilogram (KG) FD NWE (northwest Europe)  (2,800-3,040/tonne FD NWE).

This reflects decreases of €0.05-0.06/KG (€50-60/tonne) from the previous quarter.

Greater drops, lesser decreases and rollovers were also agreed in some cases but were not seen to reflect the general price trend for standard paints grade product.

Market conditions are softer with some majors acknowledging lower sales volumes in their Q2 earnings statements.

They attributed this to lower customer orders, normalised customer inventory levels and some manufacturing shortfall, among other factors.

Venator's President  and CEO Simon Turner said in the company's Q2 earnings statement that it expects the second half to be driven by seasonal factors and regional dynamics, although he considered that longer term, TiO2 industry fundamentals are likely to underpin a favourable and elongated cycle.

Chemours referred to its value stabilisation strategy in an attempt to limit the volatility in TiO2 earnings, which it said it has been successful in implementing.

The company's drive toward longer term contracts, however, was not seen to reflect a general trend in the wider market so far in Q3.

Activity in the third quarter is dampened by the quieter summer holiday period and more cautious buying sentiment for inventory-related reasons.

Macroeconomic factors and/or trade tensions are also likely to be influencing buying sentiment, according to some players, although others said they do not see any immediate impact from this.

TiO2 is used as a white powder pigment in products such as paints, coatings, plastics, paper, inks, fibres, food and cosmetics.