Argex Titanium Inc. ARGEF

Margin increase for TiO2 companies and rapid price

[canada7]

https://www.prweb.com/releases/2011/5/prweb8365545.htm
PPF11Q2 further details TZMI’s opinion that 2011 price increases are accelerating faster than experienced during the second half of 2010 and are being adopted by the market. TZMI estimates that the global weighted average price for all TiO2 pigment sold during 2010 increased by 8% year-on-year, increasing the value of the sector by 21%, from US$10 billion to US$12 billion. Value growth will be more substantial in 2011, as widespread changes to pigment manufacturing costs, particularly titanium feedstocks, will be tempered by contractual conditions.
Inventory depletion and value chain supply tightness are key factors in the current pricing environment. Producers entered 2011 with low inventory levels and TZMI ascertains stocks were not adequately built during the northern hemisphere winter months. TZMI believes that long-term under investment in capacity and permanent shut downs during the last earnings trough will compromise the ability of producers to add to significantly stocks during 2011. TZMI expects some producers to be unable to meet production targets in 2011 and some TiO2 customers will likely be unable to source desired volumes as a result.
“The tight market conditions throughout the supply chain will cause rapid price escalation through 2012 and possibly 2013,” TZMI Senior Consultant Eric Bender said. “TiO2 producers and feedstock suppliers will increase margins in 2011, with the timing of future capacity expansions in both sectors largely controlling the balance of pricing power in the value chain over the next several years. TiO2 producers’ ability to add necessary capacity hinges on feedstock producers’ ability to increase output from existing and new mines and beneficiation plants.”
For more information or to order a copy of the TZMI Pigment Price Forecast Q2 2011, visit https://www.tzmi.com.