N America Q3 TiO2 contracts rise on higher ores

HOUSTON (ICIS)–North American TiO2 prices moved marginally higher for the third quarter, mostly on upstream pressure from tighter supply and higher costs of rutile and ilmenite ores.

Photo: Titanium dioxide (TiO2) is used to make white paint.Photo source: Shutterstock

Despite comparatively tepid demand from the predominant architectural coatings markets, gains also were confirmed by customers in plastics-compounding markets.

Paper-production markets previously passed along similar increases stemming from higher-cost tariffed material from China.

The 1-3 cents/lb ($22-66/tonne) gains took the domestic price to a new range of $1.60-1.70/lb, FD (free delivered), as assessed by ICIS.

While gains dominated the market this quarter, increases were not universal in a market bifurcated by freely-negotiated contracts and producer Chemours’ Ti-Pure Value Stabilization (TVS) programme.

Chemours’ strategy to stabilise margins and offer customers less price volatility indicates price changes every six months based on a global producer price index (PPI) or flexible volumes without contracts if product is available.

The plastics markets saw some price gains and weakness, but architectural coatings prices were primarily up despite one major producer rescinding its Q3 price-increase effort.

Fewer gallons of paint have been produced so far this year, with volume falling below paint makers’ projections. After a weak start this year, buying interest improved moderately from some end-markets after mid-year, but continued to trail 2018 demand in other segments.

Producer inventories continue to be seen at or above typical 50-60 days of supply, and customer stocks vary according to end markets and proximity to supply. Lead times, however, are still averaging 30-50 days.

Diminished year-on-year buying interest, however, is expected to keep supply ample to long as the typically soft fourth quarter approaches.

Other macro factors affecting the market include ongoing US-China trade tensions that resulted in more tariffs being implemented on products in both regions, and the IMO regulations, which take effect next year.

TiO2 is a white-powder pigment used in products such as paint, coatings, plastics, paper, inks, fibres, food and cosmetics.

Major US TiO2 suppliers include Chemours, INEOS, Kronos, Tronox and Venator.

Focus article by Larry Terry