The global titanium dioxide (TiO2) market has had
a turbulent year so far in 2019, albeit one that has resulted
in price stagnation becoming a preferable alternative to the
recent steady decline in the chemical’s export
The industry, already reeling from the
implementation of tight environmental controls in China, is now
facing a number of new and unexpected disruptions - including
international trade tariffs, an economic slowdown, a shortage
of feedstocks and stricter public health legislation.
Perhaps the most dramatic of these has been the
impact of TiO2 being added to the list of products subject to
tariff hikes in the trade war between the United States and
A series of escalating tariffs on Chinese TiO2
imports to the US, which as of mid-October stood at 25%, have
effectively cut off the US from the world’s top
Perhaps more significantly, this block on a key
export market has weighed heavily on China’s
domestic TiO2 demand and has resulted in rising exports to
other parts of the world.
"Exports from China are up recently. But,
year-to-date, they are [only] up marginally compared with
previous years," Gerry Colamarino, managing director at
Pennsylvania, US-based TiPMC consulting said.
"It is very clear that exports to north America
have gone down and we’ve seen [the Chinese TiO2
that would have come here] placed in other areas, particularly
Latin America and the Middle East," he said.
Colamarino said, though, that Chinese producers
would struggle to grow exports further without improving the
grades of TiO2 they make.
"China exports multi-purpose grades of TiO2. They
have not been able to get into the more differentiated markets
and have almost saturated their markets outside China for their
current product quality," he said, adding that Chinese TiO2
prices have probably reached a floor.
"For many marginal producers, they
can’t lower prices any more, as costs have
increased and margins are thin," Colamarino said.
TiO2 manufacturer margins in China have been
helped by the weaker yuan, which increases the value local
But producers there are also facing rising labor
costs and continued scrutiny from environmental inspectors,
presenting the risk of temporary or permanent closures, or
orders to retrofit their factories with expensive modern
In mid-October, Fastmarkets assessed the price of
titanium dioxide pigment, high quality, bulk volume, cfr Asia,
at $2,200-2,550 per tonne, down from $2,300-2,600 per tonne at
the start of the year and illustrating the market torpor caused
by plentiful supplies and restricted markets for this
The comparatively small world of Western TiO2
producers was shaken up in 2019, when Connecticut,
US-headquartered pigment producer Tronox finally managed to
complete the purchase of its larger rival, Jeddah, Saudi
The deal, which faced stiff opposition from
antitrust regulators, was eventually finalized after Cristal
agreed to divest its US assets to UK-based chemical producer,
Two other major titanium producers appeared on the
scene in recent years, when The Chemours Company and Venator,
both located in the US, were spun out of their respective
parent companies, DuPont and Huntsman, in 2015 and 2017.
The spin-offs followed major restructurings and
shareholder pressure to separate out the TiO2 businesses, due
in part to the price volatility of the chemical.
Ineos, the biggest chemicals company in the world
in terms of sales revenues, is the first completely new entrant
into the Western TiO2 market in decades and its debut came at a
difficult time for the sector.
Producers in Europe and the US have been
struggling with a heavy overhang of TiO2 stocks, built up in
the first half of 2018, which has weighed heavily on prices,
particularly in Europe.
"[Western TiO2 producers] went into this year with
a need to destock, and Chemours did the destocking
singlehanded, reducing nearly 200,000 tonnes of sales in the
first half of 2019 vs. 2018," Colamarino said.
"Kronos increased its sales [and] Venator tried to
manage its volume and price relationship, but still gave up
some price for volumes," he said.
"In the past, Tronox would generally sell
everything it could produce, but is currently aligning its
regional pricing at a level somewhere between what Cristal and
[pre-merger] Tronox would have offered. Price is being managed
"Ineos is by far the smallest TiO2 producer,
almost a regional [player]. Its focus is on getting as many
tonnes out as it can," Colamarino added.
As a result of this destocking, Colamarino is
positive about the prospects for TiO2, despite persistently
sluggish demand and the possibility of another global economic
recession in the foreseeable future.
"I don’t think I’ve ever
seen an industry better adjusted for global recession," he
said. "The TiO2 industry saw the overstock and responded
quickly. Although export prices from China have reduced
considerably [in the past two years], Chemours really led the
effort to minimize [price erosion] from the [Western]
Another concern facing the TiO2 industry is the
developing structural shortage of feedstock.
This is largely down to the depletion of a number
of large heavy mineral sands resources in Australia and
Mineral sands miners concentrate first on areas of
deposits richest in valuable minerals, including rutile and
ilmenite, meaning that recovery rates fall over time.
But there are other reasons for the drop-off in
mineral sands availability.
In China, mineral sands mining in Hainan, an
island province off the coast of southern China has stalled, as
the region converts into a special economic zone with a focus
on trade, finance, and high-tech manufacturing.
And, while Ilmenite production in the central
Chinese province of Sichuan and elsewhere continues, it faces
environmental restrictions. In addition, the ilmenite rock
mined in these areas is less suitable as a chloride feedstock
than that derived from sand deposits.
Indian ilmenite exports, meanwhile, have slumped
over the past year, after the government decided in August 2018
to 'canalize’ exports of mineral sands. This means
that mineral sands can only be exported through state-run
entity, Indian Rare Earths Ltd (IREL).
The tightening of regulations on the Indian
mineral sands sector - which is centered on beach sand
deposits in southern India - has sharply reduced the
availability of ilmenite, rutile and zircon from the
S Vaikundarajan, chief executive of Indian miner
VV Minerals, hit out against the policy in an interview with
Fastmarkets in January 2019, saying that, as a competitor to
private firms, IREL has little incentive to encourage
"The new policy... is a blow to private companies
like us," Vaikundarajan said. "We have made huge capital
investments by way of technology and production facilities, and
we have established significant share in global markets.
"Private producers like us have spent millions of
dollars and more than 20 years developing foreign clients," he
said. "But the recent move by the government will nullify our
efforts if the export of beach minerals continues to be through
Exports from Vietnam have also been restricted,
due to delays in issuing new ilmenite export licenses.
Colamarino said the industry was struggling from a
lack of access to high-grade Indian ilmenite in
"It has always been the most sought after [TiO2
feedstock]," he said. "It’s the easiest to digest
and gives the best yields,"he added.
Colamarino said that political factors, which turn
partly on controversies around the detrimental impact of beach
sand mining and partly on the Indian government’s
desire to ring fence export revenues for the state, are likely
to impair the future development of the Indian ilmenite
"I have heard people speculate that those other
[non-government operated] mines may never be able to operate,"
"That’s what it’s
starting to look like. In the past, India has exported nearly
600,000 tonnes [per year] of ilmenite. Current imports are
around half that, at nearly 300,000 tonnes of TiO2."
According to Colamarino, restricted feedstock
supply is also hindering the growth of India’s
TiO2 production capacity.
"[India] a natural place to see TiO2 production
growth, but the political issues have been, and continue to be,
a major barrier," he added.
A fresh threat to the TiO2 sector has come from
the news that TiO2 products in the EU are likely to face new
consumer health warnings within the next two years.
On October 4, 2019, the European Commission (EC)
announced it would classify TiO2 in its powder form, as a
Category 2 carcinogen under the EU 'Reach’
regulations (the Registration, Evaluation, Authorisation and
Restriction of Chemicals) regulations, because when inhaled it
is suspected of causing cancer in humans.
The decision follows a recommendation from the
European Chemical Agency (ECHA) about the safety of TiO2, and
marks the end of years of legislative wrangling over the
Many in the industry fear that classifying TiO2 as
a carcinogen will reduce demand for the pigment.
If no objections are raised by the European
Parliament or the Council of Ministers, the classification will
be adopted by December 2019 and new restrictions on the
material will then be implemented over an 18-month transition
Speaking at the TiO2 World Summit in Berlin,
Germany in September 2019, before the EC’s
classification decision was announced, David Lockley,
toxicology manager at Venator, and chair of the Titanium
Dioxide Manufacturers Association’s scientific
committee, warned of the detrimental effects of the
reclassification on the industry.
The proposed change in EU rules will mean that any
powder product containing more than 1% TiO2, with particles
under 10 microns, will face a number of restrictions.
Most worryingly for consumer sales, products
meeting these criteria will need to carry a label warning of
potential organ damage, including a representative graphic that
Lockley described as resembling "exploding lungs".
Pigment in liquid form, such as architectural
paint, will not be subject to the same rules, although it will
still be obliged to carry text warnings.
Lockley expressed the widely held industry
viewpoint, that the perceived threat posed by TiO2 is based on
inadequate data, adding that his association "vehemently
disagrees with the classification."
He said the study cited in the original push for
reclassification was based on a single study in rats.
"The relevance of rat lung-overload data for
humans in questionable," Lockley said, adding that no
epidemiological studies have shown an increase in cancer for
workers exposed to TiO2 over decades.
There are very few substitutes for TiO2. The only
material which offers a comparable opacity and refractive
qualities is lead oxide, which has been vilified for its proven
toxic effects on human tissue.
Other, less-effective pigments could also face
similar classifications in the future, further shrinking the
pool of TiO2 alternatives.
"[The risk of inhalation and the consequent
carcinogenic effect] is not an inherent property of TiO2,
it’s a property of dust," Lockley said, adding
that any other poorly soluble material would be a candidate for
the same categorization.
Lockley also pointed out the effect the
classification could have on recycling waste, including
demolished buildings and plastics waste, given the widespread
use of TiO2 in construction and manufacturing.
The classification will also bring in automatic
restrictions on its use in cosmetics and certain toys and the
chemical will no longer be usable in eco-labeled products.
One pigment producer told Fastmarkets that
reformulating TiO2 production to increase particle size was a
possibility, but that the process would be complicated and the
resulting pigment could only be used in matt paints. High-gloss
paints require a finer mesh product.
"We’ve been trying to reduce the size
of the particles for 10 years," the producer said.
Producers could try to develop pigment with a
larger particle size, formulated to dissolve and disperse into
particles of under 10 microns.
And another option discussed by producers at this
year’s TiO2 World Summit was the increased use of
TiO2 in slurry form.
This product is more expensive to ship, due to the
liquid content, but would not need the same level of labeling
as TiO2 powder.
How the ECHA took the shine off
France first put forward the proposal to
categorize TiO2 as a carcinogen by inhalation to the ECHA in
In September 2017, the ECHA’s Risk
Assessment Committee (RAC) proposed that the pigment should be
classified under category ii, as a suspected carcinogen by
This proposal was repeatedly been rejected by
European Union member states, but in 2019, after an evolution
of EU rules, the European Commission was able to push the
proposed classification forward, and it is now being put to the
Europe accounts for 20% of global TiO2 demand, and
consumes 70% of the chemical produced within the continent.