here is consensus in the market that
titanium dioxide producers will attempt to enact price
increases when buyers return to the market next year.
But there is much more uncertainty in just
how successful these attempts will be, with reports of rising
stocks, and at least one major consolidation in the market now
One buyer told Industrial Minerals that he
expected the price he paid to rise by around 8-10% by the first
quarter of 2018.
But a seller struck a more cautious tone,
as he noted that end consumers are now well stocked.
"Inventories are high… this could make it hard for [the
producers] to raise prices."
And a salesperson for a major TiO2
producer told Industrial Minerals in November that they were
focusing on building up stock levels.
"We are supplying our contracted
volumes… but if there are any cancelations, we are
keeping it back," he said.
"We will not be selling any spare capacity
on the spot market for the rest of the year."
If that process has also been successful,
the TiO2 market could find itself with a buffer of stocks in
the hands of both consumers and sellers, hardly a conducive
market to force through price rises.
Another major question for markets will be
the scale of the winter shutdown in Panzihua, China. Many
manufacturers are reported to have reopened after only a brief
pause, but local regulators stand ready to enforce air quality
regulations, meaning that the pace of winter production will be
hard to predict.
Another question mark in the market is
whether producers will be able to consolidate as rapidly as
Tronox is in the process of taking buying
rival pigment producer Cristal in a move that would produce the
world’s largest titanium dioxide company.
The potential issue with the takeover is
that it will give the newly enlarged Tronox a commanding market
share, particularly in chloride-route TiO2 produced in the
Tronox maintains that it will have a
strong incentive to increase production once the sale has gone
through, but this argument has not yet convinced regulators in
the European Union and the United States, with concerns that
the company could instead limit supply to drive up prices.
One potential remedy, which could be
demanded by regulators in either jurisdiction, would be to sell
off some of the new company’s chloride capacity to
a third party, in a move that would lessen their potential
stranglehold on markets.