TiO2 analysis on 3rd Dec. 2021 by ICIS

NOTE: Please click here for full details on the criteria ICIS pricing uses in making these price assessments.
COPYRIGHTS: This article was shared to tio2.info by anonymous industrial expert for public reading. The original text was edited by Deniz Koray, Heidi Finch, Joson Ng, which was posted on ICIC at 3rd Dec.2021. If this sharing is a infringement, please click to contact us.

EUROPE CONTRACT PRICE

Table-EUROPE CONTRACT PRICE

			Price range		One year ago	US CTS/lb
FD NWE Q4	EUR/kg	+0.20	3-3.30	+0.20	2.20-2.65	54.48-168.83

Overview

• Upward momentum extends into Q1 on various factors
• Domestic supply remains constrained; imports uncompetitive, disrupted
• Demand mixed depending on end sector The bullish momentum in the European titanium dioxide (TiO2) market is extending into Q1 2022 - amid already recordhigh prices - on low TiO2 stock levels in Europe, which are likely to be further compounded by a lack of Asian import
  competitiveness, seasonal preparations and healthy demand growth estimates for next year.
  Greater domestic over import sourcing for various reasons and feedstock supply strain, along with production issues -
  including Tronox’s force majeures at its Botlek and Stallingborough sites - continue to keep supply tense in Europe.
  Demand remains varied, depending on end sector.
  Europe TiO2 contract prices have trended up throughout 2021, hitting two record highs consecutively in Q3 and Q4
  2021, driven by the market imbalance.
  

  Outlook

• Output cuts in China during the Olympics, logistic issues could impact exports in Q1 2022
• Demand forecasts bullish for 2022 into certain industrial, wind segments
• Construction sector faces high backlogs vs other product shortages, inflationary pressures
• DIY demand in 2022 will depend on consumer spend options, pandemic circumstances
• Pent-up new auto demand could materialise in H2 2022 if microchips become more available

Prices

Triple-digit price increases have been separately announced in the European TiO2 market for western product for Q1 due
to low inventories, which could be further impacted by seasonal preparations and the continued lack of Asian import
competitiveness. Feedstock supply tension and rising costs for feedstocks and energy are other considerations.
Discussions are just getting underway. Room to negotiate is likely to be limited due to low TiO2 stocks in Europe.
Although there are certain downstream players who have built some stocks during the low season, which could provide
some moderating effect.
Supply remains tight, with volumes continuing to be allocated. This is linked to the cumulative effects of robust demand
in some segments and greater domestic sourcing over a prolonged period, driven by the uncompetitive and disrupted
Asian import flow.
Production issues and feedstock supply tension were also continuing to cap availability.
Although, one trader suggested that sulphate TiO2 may not be as tight as chloride TiO2, because sulphate TiO2 is
typically more affected by the low season.
While there have been some price concessions heard for spot exports from Asia for sulphate TiO2 in order to reduce
stocks during the low season, this was not compensating for the unfavourable exchange-rate factors and high freight
costs, according to a trader, who said its chloride TiO2 export prices remain stable.
China spot indications/deals done as follows:

• €3,300-3,600/tonne DDP (sulphate TiO2 standard paints and coatings grade)
• €3,400-3,800/tonne DDP (chloride TiO2 standard paints and coatings grade)

Paper laminate demand for furniture remains robust in Q4 2021 and into Q1 2022, with order books full. Concerns about
the pandemic resurgence and new Omicron variant, along with cost escalation, have not impacted buying activity in this
segment so far.
However, other sectors such as do-it-yourself (DIY), construction and auto have seen differing impacts from seasonality
and/or other product shortages. In the construction sector, seasonal factors are also being weighed against high
backlogs.
The DIY sector has also seen some normalisation in H2 2021, following the pandemic lockdown peaks during 2020 and
H1 2021.

Analytics

Table-US CONTRACT PRICE

			Price range		One year ago	US CTS/lb
FD N America Q4	USD/lb	+0.06	1.75-1.84	+0.05	1.58-1.70	175-184

Overview

• Mid-month price increase nomination introduced
• Supply remains limited for spot buyers & contract buyers seeking additional material
• Q4 2021 contracts settle higher

A mid-December titanium dioxide (TiO2) price increase nomination was introduced by a producer. However, this was
only limited to material produced in Europe and sold in North America (see Prices).
Price increase nominations in Europe emerged several weeks ago, and there have been ongoing discussions. European
Q1 2022 proposals have been higher than in previous quarters for several reasons, including higher fuel costs. Although
natural gas prices in the US rose until late November as well, it was not to the magnitude seen in Europe.
Also natural gas prices in the US declined steeply in the past week, following news of the Omicron variant of the
coronavirus in South Africa and other countries.
There is concern about the impact of the variant on future production at Richard’s Bay Minerals, a company that is
almost 75% owned by Rio Tinto and located in the KwaZulu-Natal province of South Africa.
Price increase proposals in the US have not been as widespread through November and the first days of December.
The price chart below shows TiO2 contract pricing over the past year.

Outlook

• Rising coronavirus cases from Omicron variant raise concern in ore feedstocks
• North America price increase nominations expected
• Q1 2022 supply & demand conditions expected to be comparable to Q4 2021

Prices

Contracts for Q4 rose in late October, as producers were able to implement price increases with limited pushback due to
tight supply and strong demand.
The coronavirus situation in South Africa is being monitored closely, as cases have begun to spike in the past week due
to the Omicron variant of the coronavirus. The epicenter of the variant is the Gauteng province of South Africa, which is
also beginning to see a rise in hospitalisations.
Richards Bay Minerals, a joint venture with majority ownership from Rio Tinto, is a key site for TiO2 feedstocks such as
ilmenite and rutile ores. It is located in KwaZulu-Natal, which has not yet seen a comparable uptick, in the early days of
the variant.
Operations were suspended in July and much of August because of civil unrest, the destruction of equipment, and the
killing of a manager but have resumed since late August.

Table-Price increase announcements

Producer	Cents/lb	Effective date	Region
Kronos	5	1 January	North America
Tronox	5	1 February	Americas
Venator	6	1 January	Americas
Venator	8	1 April	Americas
Kronos	5	1 April	North America
Tronox	6	1 July	Americas
Venator	8	1 July	North America
Kronos	5	1 July	North America
Tronox	5	1 October	North America
Kronos	8	1 October	North America

There was also a new price increase nomination introduced for mid-December that applies only to European-produced
TiO2 sold in the US, which can be seen below.

Table-Price increase announcements

Producer	Cents/lb	Effective date	Region
Kronos	5	15 December	North America

A representative from Kronos did not respond to questions about the price increase proposal.
However, in a customer letter, the company said the additional increase was spurred by rising energy costs in Europe, as
well freight and certain raw materials
General Europe to North America shipping costs can be seen below, through late November

Due to price-protection agreements, some of these price increases are not implemented for 60-90 days, even after
buyers have agreed to higher prices.

Table-ASIA CONTRACT PRICE

			Price range		One year ago	US CTS/lb
CFR Asia Q4	USD/tonne	+200	3350-3500	+150	2700-2900	151.95-158.76

Table-ASIA SPOT PRICE

			Price range		One year ago	US CTS/lb
FOB China Q4	USD/tonne	n/c	3050-3100	-50	3100-3200	138.35-140.61

Overview

• Spot talks in Asia subdued but demand present
• Chinese demand remained weak
• No big change to supply and demand balance

Market fundamentals in the spot market did not shift much week on week but spot buying in Asia remained subdued.
The spot assessment was adjusted downwards on average on lower selling indications.
Demand in the Chinese domestic market was poor and domestic prices were heard lower. With domestic buying slow,
producers were looking more to the export market and it showed in higher Chinese export figures in October.
While the Chinese domestic market was subdued, there was however a positive news. In November, the Purchasing
Manager Index (PMI) of China’s manufacturing industry was 50.1 percent, according to the National Bureau of Statistics
of China. It was 0.9 percentage point higher than October and pushed the index above the threshold of 50. That signals
an expansion.
Elsewhere, some market participants said freight cost from December has risen and end-users were potentially looking
at higher offers on a CFR basis. Some buyers think if certain producers have inventory pressure, they could help absorb
some of the cost by lowering the FOB prices moving forward.
Demand was present in Asia with buyers stating that they have either bought previously or planning to enter the spot
market very soon. Sellers mostly did not see any change to the supply situation. They think the spot market should be
relatively quiet for the rest of the year.
There were still mixed views on how Chinese production would be impacted in January and market players were
unsurprisingly eager to find out more before making plans in the spot market. Many thinks the situation should clear up
in H2 December.

Outlook

• Market waiting for clearer indications on January production
• Some spot interest expected in Asia
• Q1 contract talks to gather pace

Prices

Selling indications were mostly around the $3,100/tonne FOB China level. There were buy indications at $3,000/tonne
FOB China and higher but no deals were heard. One buyer said it recently concluded a deal for a January arriving lot so
it would be out of the spot market in the immediate future.
Contract price for Asia
In Asia, Ishihara Sangyo Kaisha announced that the company would increase prices of its TIO2 in the Asia Pacific region
by $200/tonne from 1 January 2022.
There were no deals heard in the week. One buyer said the price hikes were too steep an it expects its talks to drag on
to end-December or even early January.
Asian Q4 contracts were settled higher.