The
big players in the global titanium dioxide market (TiO2) have risen the prices
again at the end of February. This trend supports the positive development of
the industry and gives a sign for the coming peak season of TiO2, as well does
the proposed acquisition of Cristal by Tronox.
Source: CCM
Three
of the four big western players in the TiO2 business have raised their prices
on March 1. China’s tiO2 manufacturers already raised the quotations at the end
of February, due to the positive development of the market and the preparation
for the coming peak season of TiO2.
Chinese companies
Lomon
Billions, by far the biggest manufacturer for tiO2 in China and one of the
biggest manufacturers worldwide has raised the prices of all types of TiO2 on
February 20, according to CCM. Lomon Billions is the new company merged of
Henan Billions and Sichuan Lomon, the two biggest companies in China before.
Hence, Lomon Billions has the strongest influence on the price trend in China
and many manufacturers are likely following its raises. The company has risen
the prices for domestic buyers by USD102.11/t and for overseas purchasers by
USD100/t.
Other
mentionable companies, which raised their prices in late February, were
Shandong Doguide on February 20 and Dawn Titanium Industry on February 21.
Shandong Doguide raised the price of rutile TiO2 by USD72.93/t and the one for
overseas clients by an amount of USD80/t. Dawn Titanium showed the largest
price rise of Chinese manufacturers with an increase of USD116.69/t for the
domestic buyers and USD100/t for the overseas clients.
Western companies
The
Chemours Company has increased the price of its Ti-Pure TiO2 for the relevant
clients in North America, Asia Pacific, Latin America, Europe, the Middle East
and Africa. The price rise for the Asian pacific clients has been stated as
USD150/t, according to CCM.
Huntsman
has only risen the prices for North American clients on March 01 by USD154/t.
However, the company announced price rises forth the other countries for April
1. It is notably here, that the price of TiO2 for Asian clients will only
increase by USD160/t, while the price rises for the other regions will be much
higher, namely USD250/t.
Finally,
Cristal Global raised the prices in different degrees for different regions
for its Tiona and Tikon TiO2. That includes a price rise by USD200/t for Asian
Pacific clients, a lower increase of USD154/t for buyers from North America,
and the highest price rise hits Latin America, Africa, and the Middle East with
an amount of USD225/t.
Nevertheless,
there is some bigger news with Cristal Global nowadays. The company, which is
owned by 79% by the Saudi Arabia-based Tasnee and 20% by the Gulf Investment
Corporation, has announced to merge its subsidiary National Titanium Dioxide
Company with Tronox limited. This would create the largest TiO2 manufacturer
worldwide, in terms of sales and production capacity. According to the deal,
the Cristal owners would get 24% share of the newly merged company, while the
shareholders of Tronox look at 76% of share.
The
whole deal is worth about USD1.673 billion, according to Business Standard. The
newly merged company will have 11 plants in eight countries worldwide, able to
produce 1.3 million metric tonnes of TiO2 pigment.
Outlook
Market
intelligence firm CCM believes, that the current price rising represents the
trend to a positive development of the TiO2 industry. The price is likely to
continue remaining high in the short run, with a beneficial backup of the
supply-side reform in China.
China’s
supply and demand balance of TiO2 was fairly balanced in 2016, looking at a
supply of 2.6 million tonnes and demand of 2.48 million tonnes. The trend to a
more balanced TiO2 market is due to the supply-side reform under which guidance
an amount of 260,000 tonnes per year of outdated capacity has been eliminated.
Since the reform, which was implemented two years ago, is still going on, the
further output of outdated TiO2 capacity is expected to be eliminated, which
will balance out the sheet once more and supports a strong price development
for titanium dioxide in China.
Another
factor supporting a sustainable price rise is the higher concentration in
China’s TiO2 market. As mentioned before, Henan Billions has acquired Sichuan
Lomon at the end of 2016, which made the new enterprise Lomon Billions become
the biggest manufacturer of TiO2 in China with a huge influence on the industry
trend. The combined capacity of China’s former two biggest producers is now
560,000 tonnes per year. More companies in China are looking at the power of
Lomon Billions with sorrows, which drives them to expand their capacities as
well. With the newly gained market share, they will be able to weaken the
monopolistic position of Lomon Billions to some extent, but also enhance the
concentration of China’s TiO2 industry even more.
About CCM
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
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