Producers, consumers, and traders of
titanium dioxide (TiO2) report that markets are reaching a
balance after two years of strong demand and constrained
supply. But some fear this new-found stability could be
disrupted if feedstock markets continue to tighten.
TiO2 buyers in Europe and China have
reported slightly easier markets since July 2018, concurrent
with inventories recovering from a prolonged period of very
Prices have been on a long-term uptrend
since early 2017, driven by two chief factors: reduced output
in China and increased global demand.
Environmental inspections in China hit
production and forced the closure of a large number of smaller
local producers that were using outdated and highly polluting
technology, while global demand rose due to increased consumer
spending in key markets.
The market is once again finding a
balance, buyers said, with new production capacity in China
replacing the older and outdated facilities that were closed,
while the growth in spending slows.
A large number of pricing contacts have
confirmed these expectations to Industrial Minerals, which have
also been expressed publicly by a
number of the largest TiO2 producers.
Long-term TiO2 demand is closely linked to
economic activity, which drives consumption in the
manufacturing and construction sectors.
So far in 2018, economic activity has been
accelerating in the US, but the pace of GDP growth has been
lower year on year in China and the EU.
Inventory levels are rising in China due
to slow local demand, despite rising exports to Europe, a buyer
of Chinese material reported to Industrial Minerals.
Industrial Minerals assessed prices for titanium dioxide
pigment, high quality, bulk volume, cfr Asia, at
$2,600-3,000 per tonne on August 9, compared to a yearly high
of $2,800-3,100 per tonne last assessed on June 7.
"[Chinese producers] are aggressively
marketing [their material] to European buyers," one trader told Industrial Minerals in
Multiple participants in the European
markets have reported heavy stocks all along the supply chain,
swollen by the rising imports.
"Nobody is desperate, nobody is fighting
to buy," a seller said.
Industrial Minerals assessed the price of
pigment, bulk volume, cif Northern Europe, at
€2,650-3,100 ($3,031-3,540) per tonne on August 9, down
from €2,800-3,200 per tonne in June 2018.
Yet, buyers and sellers of
titanium-dioxide feedstock mantain that the mineral end of the
market is still experiencing significant supply-side
Integrated producer Tronox's shift away
from external sales and a series of shutdowns and industrial
problems at Richards Bay minerals in South Africa have
lowered the global availability of rutile, chloride and
This problem is likely accelerate due to
miner Iluka's easing output and a
shortage of new projects coming online to replace old and
Industrial Minerals assessed prices for rutile concentrate
min 95% TiO2 bulk cif China at $950-1,100 per tonne on
August 9, compared to $800-840 per tonne a year ago.
"I can see a scenario where feedstock
prices will escalate due to a looming supply crunch," one
player in the feedstock market told Industrial Minerals.
"Feedstock and pigment prices might even end up having to
increase regardless of pigment demand due to feedstock
Speaking about the US TiO2 market, one
trader said that Tronox, Rio Tinto and Illuka's production of
high-end feedstock would be key world supply for the rest of