SINGAPORE (ICIS)--Spot prices of titanium dioxide (TiO2) Chinese exports rebounded in the week amid tightened supply levels as the government’s enforcements of environmental protection measures intensifies, market players said on Thurdsay.
Spot prices rebounded in the week ended 25 August, closing at $2,450-2,700/tonne FOB (free on board) China, ICIS data showed.
TiO2 export prices have fallen by 11% from 26 May to 11 August, ICIS data showed, having been under pressure owing to growing inventory levels amid weak domestic buying.
However, the spot market took a turn in late August, with prices gradually beginning to climb as producers began to raise offer prices as spot cargo availability grew tight once again.
Inspections implemented by the Chinese government in the second half of the year has resulted in shutdowns of several TiO2 production plants in the country due to violations of environmental regulations.
Market players say that the current situation is not exclusive to the TiO2 industry, with many other chemical and manufacturing plants impacted by measures rolled out by the Chinese authorities.
Upstream supply of ilmenite and other raw materials has also grown tight as a result, and some TiO2 producers were struggling to secure sufficient feedstocks for downstream productions.
Some market players say that some Chinese producers had previously cut offers too sharply, and regard the current price increase as a correction.
“Several Chinese producers had cut prices too aggressively previously, when spot prices were downtrending, in order to secure more sales orders. Now that supply levels have tightened once again, its natural that these producers would be seeking higher prices," a trader based in northeast Asia said.