China TiO2 export prices under pressure amid ample inventories

SINGAPORE (ICIS)–Chinese titanium dioxide (TiO2) export prices are under pressure amid ample supply and softening feedstock costs, market players said.

Offers last week differed widely depending on the inventory situation of each producer. Major producers offered cargoes at $2,750/tonne FOB (free on board) China to buyers in southeast Asia in the absence of any significant inventory pressures, while offers to buyers in Europe were higher at $2,800/tonne FOB China and above.

In comparison, second-quarter contract settlements for other international producers were at $2,650-2,800/tonne CFR (cost and freight) Asia. Third-quarter contract discussions are in progress, with offers in the upwards of $2,800/tonne CFR Asia.

On 7 July, spot TiO2 prices for Chinese exports were assessed at $2,650-2,800/tonne FOB China, stable week on week, according to ICIS data.

Major Chinese producer Henan Billions Chemicals is understood to have attempted to increase its asking prices by $30/tonne on an FOB basis last week given its low TiO2 stocks.

Meanwhile, a separate Chinese producer, Shandong Dongjia, is expected to conduct a two-week turnaround at its 160,000 tonne/year plant in August, and this will tighten its availability of spot cargoes.

Buyers of Chinese exports, on the other hand, were reluctant to procure cargoes at increased prices, citing much lower offers from smaller producers.

Some buyers in southeast Asia received offers at as low as $2,200-2,300/tonne FOB China from smaller producers that were grappling with high inventory.

Nonetheless, buyers are reluctant to procure cargoes from smaller producers despite the low offers.

“For the smaller TiO2 producers, many buyers have yet to test out the quality of their materials. So unless the offers are really low, buyers won’t be inclined to procure significant volumes from them,” a southeast Asia-based buyer said.

TiO2 inventories have built up in China due to weakening domestic demand, and with some international buyers put off by sharp spikes in Chinese exports prices, industry sources.

China’s TiO2 export prices had steadily increased from the start of the year to end-March, and then were steady for about a month; posted some further gains in May before falling in June, according to ICIS data.

The strong gains in the first quarter was on account of strong feedstock ilmenite prices, which slumped in the second quarter, taking out a pillar of support for the TiO2 market.

Focus article by Leanne Tan

Picture: Titanium dioxide (TiO2) is used in paints and pigments. (Source: Design Pics Inc/REX/Shutterstock)