The year started with a bleak outlook after Iluka Resources
told investors during an earnings conference call that
"we’ve entered 2017 with less volume contracted"
after foreseeing price increases in 2016.
Matthew Blackwell, head of mineral sands marketing, warned that
"sales in 2017 compared with 2016 will be lower, and lower
again in 2018".
Mineral sands miner Base Resources said it expected further
improvements in ilmenite prices throughout 2017 due to an
improving TiO2 market. It also expected disruption to ilmenite
exports from India and lower ilmenite production in
China’s Sichuan province due to environmental
inspections to buoy prices.
"Base Resources’ expectation is for rutile prices
to start trending upwards during 2017," the company said.
While ilmenite prices subsequently tracked higher, they fell
back in July although they remained above 2016 levels.
Environmental legislation in China hit several small producers,
causing supply disruptions, and there was also a ban on heavy
mineral sand mining in Tamil Nadu, India.
Elsewhere, the closure of Sibelco’s Stradbroke
Island became a concern, especially for welding producers,
which rely on rutile from the mine. The
operation’s shut down will take around 35,000
tonnes of rutile from the market by 2020.
2 company price hikes
Cristal, Huntsman and The Chemours Co all raised prices over
the year by $225-250 per tonne.
Away from the western producers, Chinese TiO2 producers also
raised their prices over the year.
Ishihara Sangyo Kaisha Ltd, one of Asia’s largest
TiO2 producers, announced in March that it would raise its TiO2
price by $150 per tonne from April 1.
Lomon Billions announced a TiO2 price rise at the start of the
year, citing the rapid price increase of source materials and
logistics costs. The company subsequently raised prices a
further six times.
Other companies quickly followed suit.
Luoyang Yuxing Chemical Co and Luohe City Xingmao Titanium
Industry Co raised prices 700 yuan tonne for chloride route
rutile type TiO2 for the domestic market and $100 per tonne for
the export market.
Yunnan Metallurgical Xinli Titanium Industry Co raised its
chloride route TiO2 prices by 1,000 yuan per tonne for the
domestic market and $150 per tonne for the export market.
CNNC Huayuan Titanium Dioxide Co, Anhui Annada Titanium
Industry Co, Guangxi Shunfeng Titanium Industry Co, DoGuide
Group, Fangyuan Titanium Industry Co, Dawn Group, Guangdong
Huiyun Titanium Industry Corp, Yunnan Xinli Nonferrous Metals
Co, Panzhihua Iron & Steel Group Titanium Industry Co,
Lomon Billions and Panzhihua Dongfang Titanium Industry Co
raised prices by 500-1,000 yuan per tonne in March.
Lomon Billions suggested the market would continue to rise,
citing increased demand from developing countries such as
India, Brazil and South Africa due to rapid development of
infrastructure as well as continued demand growth from China.
If it was an interesting year in terms of pricing, it was
also a year when many companies made bold moves either to
consolidate or earn a greater market share of the TiO2
In February, US-based TiO2 producer Tronox Ltd signed an
agreement to buy Cristal’s TiO2 business for
Tronox sold its Alkali business, which includes soda ash
production, to Genesis Energy in September as part of the
The combined company will operate 11 TiO2 pigment plants in
eight countries, with total capacity of 1.3 million tpy, as
well as titanium feedstock operations in three countries with
capacity of 1.5 million tpy. Tronox described the future
operation as "the world’s largest and most highly
integrated TiO2 pigment producer".
The acquisition, unanimously approved by the boards of both
Tronox and Cristal, is subject to approval by Tronox
shareholders as well as regulatory approvals. The transaction
is expected to close before the second quarter
In February, Huntsman Corp said it would spin off its pigments
and additives business into a separate company, Venator
Venator comprises two main business groups: titanium dioxide,
which will produce TiO2 pigments; and performance additives,
which includes iron oxide, barium sulphate, complex inorganic
coloured pigments, zinc sulphide, metal carboxylate driers,
timber treatment chemicals and water treatment chemicals.
In May, Huntsman and Clariant announced a merger by the end of
2017, combining two speciality chemical companies, with
interests in a range of industries, including pigments such as
titanium dioxide, as well as bentonite, into a new company
The new company was expected to deliver sales of around $13.2
billion and adjusted Ebitda of $2.3 billion, valuing the
company at around $20 billion.
But the deal was scuppered by activist investors who acquired
a sizable stake in Clariant, suggesting that the best value
for shareholders was away from the Huntsman deal.
Lomon Billions acquired ilmenite producer Panzhihua Ruierxin
Co for 190 million yuan to secure raw material supply.
AkzoNobel and PPG Industries Inc
Dutch paints and coatings manufacturer AkzoNobel rejected
unsolicited, non-binding and conditional takeover offers from
US paints giant PPG Industries Inc in March.
PPG made three bids for the Dutch company. The last, made in
late April, valued the European paint company at €26.9
billion (£22.8 billion).
Akzo rejected it, saying it undervalued the company, and
accused PPG of a "lack of cultural understanding of the
Akzo then put forward an alternative plan to the merger,
promising to give shareholders €1.6 billion. It also said
it would spin off its chemicals subsidiary, which represents a
third of sales and profits.
This was to placate shareholders, namely Elliot Advisors, the
largest shareholder, which repeatedly tried to unseat Akzo
chairman Antony Burgmans.
Investors, led by Elliot, were angered by the rejection of a
takeover bid from PPG early in 2017. Akzo at the time cited the
forecast €100m of earnings among reasons to turn down the
offer and suggested its spin-off plan offered better value.
A truce was agreed in August - the company moved forward with
plans to spin out its speciality chemicals segment from its