Europe TiO2 tightness intensifies on Chemours FM, high season

21 April 2017 10:35 Source:ICIS News

AsiaLONDON (ICIS)--Tightness in the European titanium dioxide (TiO2) market has been further exacerbated by Chemours’ force majeure declaration in Europe last week, coinciding with peak season in the main downstream paints/coatings and plastic sectors and driving spot and contract prices up significantly, market players said.

“It is very tight now, it [supply] is very limited and the [spot] prices are going up every week nearly, the [Chemours] force majeure on top of everything else, there is alot of tension and there is a high season,” said one reseller.

“We are probably now at the worst moment as the coating season is starting,” said one buyer.

Several buying and reselling sources said they are struggling with volume constraints and lengthy lead times of 45-60 days for European origin material, with some sources adding that they were living from hand to mouth.

A few resellers said that they had limited volumes and they were sold out until June, if not further ahead.

TiO2 stocks in Europe were low entering 2017, because of producers’ strict inventory controls over the past year, combined with restructuring measures globally. Huntsman’s TiO2 plant fire at Pori in Finland in early 2017, the resulting force majeure on product from Pori and the extended disruption at the site has heightened the market tightness, particularly for certain grades such as printing inks, among others.

Imports ex-Asia have also been less available in Europe recently for supply and price related reasons.

In addition, demand has been good during the first quarter, possibly because of some pre-buying activity. There are also signs that activity from the downstream paints/coatings and plastics sector is increasing seasonally in the second quarter, which is adding further pressure on supply.

Chemours' force majeure on its TiO2 supply due to logistical disruption at the port of Antwerp last week has also led to further supply limitations in Europe. At the time of the announcement, Chemours  forecast that the FM would be in place for three weeks.

Players do not expect to see any relief in supply in the wider TiO2 market in Europe during the second quarter, because of high paints/plastics season, already low stock levels and any pre-production ahead of the summer holidays.

One buyer said it was finding it hard to get confirmation of orders and that it needed to shift volumes among the regions internally in order to manage the tight situation. It said it was just about managing with its volumes, but it said it was tough.

A few customers said they were unable to get volumes from certain suppliers because of output constraints or other factors, but they said they have managed to source sufficient volumes from other suppliers in Europe or outside the region.

However, they said that they needed to pay a sizeable premium in order to secure the volume, but they said they prepared to do that in order to be able to continue their downstream production and supply their customers.

One of the TiO2 buyers said it had accepted a premium of around €500/tonne compared to its purchase the previous quarter, in order secure any volumes outside of contract.

Spot prices were quoted at around €3,000/tonne FD and above, with prices talked comfortably in the €3,000s/tonne for specialty printing inks grade.

Contract price rises of €200-250/tonne were frequently heard for the second quarter so far, on a take-it-or leave it basis, because of the tight supply situation. 

“We have accepted the full increases, we had to accept in full, no relief from anyone,” said one buyer.

Price hikes of €250-300/tonne were also mentioned for the second quarter, particularly for specialty printing ink grades and also in certain cases for other grades. By contrast, lower rises of high double digits and low triple digits were also heard for the second quarter in one or two cases, but this was for very large volumes and not confirmed in the wider market so far.  

European TiO2 contract prices in the first quarter were assessed at €2.11-2.35/kg, according to ICIS data.

Picture source: AkzoNobel

By Heidi Finch