US Chemours to idle TiO2 capacity amid Europe, China slowdown

Al Greenwood


HOUSTON (ICIS)–Chemours plans to idle a portion of its titanium dioxide (TiO2) capacity by an unspecified amount as demand for the white pigment remains weak in Europe and China, the CEO of the US-based producer said on Wednesday.

“We are going through a bit of an adjustment on TT,” said Mark Newman, Chemours CEO, who referred to the company’s Titanium Technologies business by its initials, TT. Newman made his comments during an earnings conference call.

Demand for TiO2 has fallen significantly and quickly, particularly in Europe and China, he said.

“We want to do the right thing long term for the business by adjusting production schedules against demand,” he said. “We will have a couple of rough quarters as we adjust production schedules.”

Chemours did not disclose the magnitude of any capacity reductions, in keeping with company policy.

However, Newman did say that Chemours can temporarily idle single lines at its TiO2 plants.

The company’s plants are quite large when compared with its competitors, he said. “So when we idle a line, that could be the equivalent of a competitor idling a plant.”

When Chemours does idle a line, Newman said the company is skilled at finding ways to cut cost. When demand recovers, the line can resume operations very quickly, he said.

Chemours expects the decline in TiO2 demand to bottom out in the next couple of quarters, likely in the first quarter of 2023, he said.

Long term, the company wants its TiO2 business to reach 25% margins over time, Newman said.

Another step being taken by the business is to work through some of its higher cost inventory that it bought earlier in the year, he said.

At the end of the year, the company will bring down its own inventories of finished goods for cash purposes, Newman said.

Such steps are typical of companies.

The outlook for TiO2 is different in North America and Latin America, where volumes and demand continue to do well, Newman said.

Chemours’s TiO2 sales and production have greater exposure to North America than many of its competitors, he said. That exposure allows Chemours to benefit from the region’s relatively stronger demand for TiO2 and from its lower energy costs.

Chemours relies solely on the chlorine-based route to produce TiO2, and chlorine production consumes a lot of energy.

In North America, TiO2 inventory levels are in line with where end customers want them, Newman said. As the market prepares for the start of the coatings season in spring 2023, there could be some inventory building.

TiO2 is a white pigment that makes paints opaque. Other chemicals used to make paints and coatings include solvents such as butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA).

Blends of aliphatic and aromatic solvents are also used to make paints and coatings.

Chemours also makes fluoropolymers such as Teflon and Nafion and fluorochemicals such as Opteon and other refrigerants.

Thumbnail shows white paint. Image by Shutterstock


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