Titanium dioxide markets are entering an upswing while
the global economy gets back into action with the effects of
the Covid-19 pandemic beginning to fade. Markets which have
been stagnant for years are starting to see growth, with
depleted inventories and growing global demand fueling new
But producers face an uncertain future because the
long-standing structural shortfall in titanium dioxide
feedstock has only grown wider in recent years, with new
pigment capacity outpacing ore production.
Chinese demand boosted
Titanium dioxide is by far the most widely used white
pigment. No substitute can match the whiteness, opacity and low
toxicity of titanium dioxide. For this reason, it finds its way
into almost all commercially produced paint, as well as a huge
range of manufactured goods.
Demand for titanium dioxide is very closely linked to
global gross domestic product growth. The key drivers of
titanium dioxide demand are manufacturing, particularly
consumer goods and automobile manufacturing, construction and
renovation. These are all closely linked to spending patterns.
When the economy is growing, optional spending on consumer
goods and housing increases.
Titanium dioxide has long been held to be one of the
most classically cyclical commodities. When times are good,
demand is high, and users rush to build up stocks. And when
growth slows, and demand ebbs, the market turns rapidly
bearish, with users surviving on stocks and hand-to-mouth
purchases until demand recovers.
For this reason, the economic upheavals of 2020 could
have been expected to badly disrupt the titanium dioxide
market. But the effects on prices were relatively muted. For
titanium dioxide pigment, sulfite grade, fob China, prices fell
to $2,250-2,450 per tonne at the start of 2021, from
$2,200-2,550 per tonne a year earlier, having only gone as low
as $2,100-2,300 per tonne during the intervening
And now, with economic activity in China recovering,
prices have hit a sustained upward trend for the first time in
years. Fastmarkets assessed the price of titanium dioxide
pigment, sulfite grade, fob China at $2,600-2,800 per tonne on
July 29. The reason for this rapid recovery is that stocks,
both in China and among users of high-grade chloride titanium
dioxide in Europe, are low.
The global titanium dioxide market is split into two
main production methods. Sulfate titanium dioxide can be
produced from a wide range of feedstocks for a lower price, but
the process has a greater potential for pollution and the
end-product is of lower quality. Chloride-route titanium
dioxide is more technologically challenging, and requires
higher-grade feedstock such as rutile, titanium slag or
high-quality ilmenite, but the product is brighter.
United States-based Chemours produces high-quality
titanium dioxide products through the chloride route with the
use of proprietary technology. Sulfate-route titanium dioxide
production is the primary means of production in China, but
chloride production is also rising rapidly.
Chinese economic growth slowed sharply in 2020, while
the country absorbed the first wave of the Covid-19 pandemic.
There are signs that titanium dioxide exports from China are
starting to slow.
Titanium dioxide exports in the first six months of
2021 were 640,538 tonnes. This is an increase from 563,153
tonnes in the first six months of 2020, but a drop from the
651,011 tonnes exported in the second half of 2020.
Indian demand for Chinese exports was hit by the 2021
Covid outbreak and subsequent lockdown. But Chinese exports are
also being hit by increased local demand. "Chinese TiO2 demand
is at an all-time high. There is less available for export," a
trader told Fastmarkets.
This is driving a long-term decoupling, in which the
US and European markets are increasingly becoming
self-sufficient in titanium dioxide. Although it remains the
largest exporter, China is no longer setting the pace of global
markets. "This trend has been emerging for a long time.
Sulfite-grade TiO2 does not meet western
consumers’ environmental requirements," the trader
This decoupling is being accelerated by the lingering
effects of the US-China trade war, after former US President
Donald Trump imposed tariffs on imports of Chinese titanium
Benefits of supply
Prices are also rising, albeit more slowly, in Europe
and North America. The stage for these price rises was set by a
sustained effort by western chloride titanium dioxide producers
to disrupt cyclicality, varying their output to reflect changes
This policy has been pursued by Chemours, which has
been operating well below capacity since 2019 while it
implements a price stabilization strategy designed to reduce
price fluctuations. With demand now recovering, Chemours has
been ramping up production in response. In quarterly results
for the January-March period, released in May, Chemours
reported sales were up by 16% year-on-year, while
currency-adjusted prices were down by 1%.
"We believe that renovation and remodeling trends are
strong, with stimulus and infrastructure potentially providing
longer-term tailwinds," Mark Newman, then chief financial
officer at Chemours, said when the results were released.
Newman has since taken over as chief executive
And on July 28, Tronox, which is now the largest
integrated titanium dioxide pigment producer, reported record
revenues and volumes sold in the quarter ended June 30, 2021.
Titanium dioxide volumes were up by 45% year-on-year, and up by
1% quarter on quarter. Titanium dioxide prices achieved by
Tronox were up by 9% year-on-year, and 5% quarter on
Jean-François Turgeon, Tronox co-chief
executive officer, said: "We believe we are still early in the
cycle. Regional pricing initiatives are continuing across both
TiO2 and zircon. Demand remains very strong, driven by a
recovery across all of our end-markets, and we are working very
hard to support the demand of our customers."
"For the third quarter," Tronox said, "we are
balancing strong customer demand against our ability to deliver
based on continued supplier and logistics constraints. Taking
these factors into consideration, we expect TiO2 volumes to
decline by 5-10% sequentially, which still represents growth
compared with third-quarter volumes in 2020, 2019 and
And signs of demand from major titanium dioxide
end-users were also extremely positive. In results for the
second quarter of 2021, released on July 19, paint maker PPG
reported net sales of $4.4 billion, an increase of 45%
year-on-year, showing very strong coating demand despite the
continuing logistics disruptions caused by the
"Our strong organic sales growth reflects a partial
demand recovery from the pandemic, including above-market
contributions across many of our businesses," PPG chief
executive Michael McGarry said. "However, our volume growth was
significantly tempered due to various supply and component
disruptions, including those that reduced the overall
manufacturing capability of our customers."
AkzoNobel, another paint-making giant, also reported a
rapid rise in coatings demand, with January-June 2021 revenues
up by 18% year-on-year, due to strong end-market
There is a cloud on the horizon for titanium dioxide
producers, both in China and particularly in the US, and that
is an emerging shortage of feedstock.
Chinese titanium dioxide producers have been dealing
with a local shortfall in ilmenite production, forcing higher
imports and raising prices. Fastmarkets assessed the price of
ilmenite concentrate, 47-49% TiO2, cif China, at $280-300 per
tonne on July 22, up from $210-230 per tonne a year earlier and
$190-210 per tonne at the start of 2020.
The market for high-grade feedstock used in chloride
TiO2 production could be about to get tight as well. Rio Tinto
on June 30 declared force majeure on customer
contracts for titanium slag production from its Richards Bay
Minerals site (RBM) in South Africa. Titanium slag is a form of
upgraded ilmenite and is suitable for use in chloride TiO2
RBM halted mineral sand mining earlier this year due
to an outbreak of violence that threatened the safety of
workers. More recently, on July 21, Rio Tinto announced that
the RBM operations will shut one of its four titanium slag
furnaces, slowing the depletion of stockpiled feedstock after
mining operations at the site were halted. With mineral sand
mining stopped, the furnaces at RBM have been relying on
"Shutting a furnace has a major effect on the business
and broader community, and is not a decision we have taken
lightly," Rio Tinto’s chief executive for
minerals, Sinead Kaufman, said. "However, we will not put
production ahead of the safety of our people, and there are
still fundamental criteria that must be met before we can
resume operations in a sustainable manner."
RBM is a major seller of rutile and zircon, and one of
the largest producers of titanium slag, which is upgraded from
ilmenite produced at the mine. A planned $463 million upgrade
to RBM has been on hold since 2019 due to security problems at
the site. Rio Tinto has suspended its titanium slag production
forecasts due to the violence at RBM.
Rio Tinto, which also produces titanium slag at a
facility in the Canadian province of Quebec, is the only major
non-integrated titanium slag producer supplying titanium
dioxide pigment producers. Its titanium dioxide slag production
was down by 7% to 1.12 million tonnes in 2020, which was a
decline the producer attributed to lower market demand and
operational problems at its RBM facility.
Elsewhere, Iluka’s Sierra Rutile mine in
Sierra Leone will suspend rutile production in the fourth
quarter of 2021, because of business and financial
Globally, there is a backdrop of a long-standing
decline in rutile production because of the shortage of
suitable high-grade mineral sand deposits, and the depletion of
ore quality at existing sites. Mineral sand deposits contain
varying concentrations of different minerals, and miners often
focus on the area richest in rutile, compared with the less
valuable ilmenite, meaning that the total amount of rutile
produced will fall over the life of the mine.
So far, high-grade feedstock prices have been slower
to rise than ilmenite, due to the lower ability of European and
American producers to ramp up capacity. Fastmarkets assessed
the price of rutile concentrate, 95% TiO2 min, large volumes
for pigment, fob Australia, at $1,300-1,400 per tonne on July
22, compared with $1,150-1,200 a year earlier.