Upward momentum for TiO2Strong Asian demand underpins pricing recovery for titanium dioxide pigment
Tightsupply, low stock levels and a rising demand for titanium dioxidepigment are supporting price rises recently put forward by producers,according to a consultancy group.
Inits latest report, Australia’s TZMI Group predicted that recentlyannounced price hikes by leading producers are likely to flow through infull to the market by the year-end.
Inmost regions, price hikes have been pushed through in local currencies.This could see some pigment prices hiked by as much as $400-450/tonneover 2010.
Pricesincrease announcements from leading pigment producers have come thickand fast in 2010, but as David McCoy, Senior Partner with TZMI put it:“Forecasting pigment price through these periods of tight supply is
extremely difficult.”
“Thelonger term outlook will be highly dependent on the timing of anyincremental capacity that can be added over the next two years, incombination with the acceptance of Chinese material in wide globalmarkets,” he
added.China has seen exports rise to feed demand, as it is the only region inthe world with excess capacity. However, TZMI forecasts thatAsia-Pacific, the world’s largest TiO2 market, will continue to grow
Pigmentdemand is estimated at 1.79m. tonnes in 2009, and the company’s latestforecast is that it will grow to 2.54m. tonnes by 2015, which representsan annual growth rate of 5.9%
Urbanisation fuels growth
TiO2 demandin China is expected to grow with the increased urbanisation in thecountry. Some 46% of the Chinese population is considered urbanised.
By2025 this percentage is forecast to rise to 50%, representing another50-100m. people and adding new demand for construction and housing.
TheChinese economy is predicted to grow by around 7-8% pa over the nextdecade, and therefore TZMI is anticipating that Chinese titanium dioxidepigment consumption will reach 1.46m. tonnes by 2015.
In other regions, demand is expected to resume growth in Europe and North America after years of decline.
In other developing regions such as Latin America, the Middle East, Africa and Central Europe, demand is
predicting to outpace global GDP rates, but not grow as quickly as China.
Global TiO2 pigment demand is estimated at 4.66m. tonnes in 2009, down 3% from 4.81m. tonnes in 2008.
Thereis little chance of any new identified investment in additionalbrownfield capacity in 2010 or 2011, which means that the tight supplyscenario is likely to continue until significant additional capacity isavailable.
This will support higher pigment prices in 2011 in all markets, a situation which is long overdue according to
pigment and feedstock producers.
28 September 2010
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