SINGAPORE (ICIS)--Asia’s titanium dioxide (TIO2) supply is likely to remain snug in the near term, with buyers expected to be more active in the second half of October.
- China inventories remain low
- Spot prices up for third week
- Demand healthy at some downstream industries
In China, the main exporter in the region, inventories are low amid healthy demand in both the domestic and external markets.
This market condition will likely persist after the long holiday in the country.
The Chinese markets are currently closed for the Mid-Autumn and National Day holidays, termed as Golden Week (1-8 October).
Spot TiO2 prices in Asia were assessed in the week ended 2 October at an average of $1,985/tonne FOB (free on board) China, up by $15/tonne from the previous week, according to ICIS data.
Prices have risen for three consecutive weeks, the data showed.
“For me, demand has recovered,” said a Chinese producer while noting that the market could be supported in November as inventories have generally stayed low.
“For December, we have to see,” the producer said.
TiO2 is used as a white powder pigment in products such as paints, coatings, plastics, paper, inks, fibres, food and cosmetics. It has applications in the automotive and construction industries.
Some downstream sectors are doing well, although the automotive industry has remained weak.
Buyers have adopted a wait-and-see stance on the market until after the China holiday.
There are talks that a producer may announce new offers right after the holiday but it is unclear how it is looking to price its cargoes.
On the TiO2 contract front, fourth-quarter negotiations are set to start in earnest shortly, with initial buying indications at a rollover of third-quarter prices.
Focus article by Joson Ng
Photo: A high-rise construction in Wuhan, Hubei Province in central China - 11 August 2020. (Photo by Xinhua/Shutterstock)
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