But buyers said they may not require strong volumes in the last three months of the year, having secured adequate inventory in the third quarter, when TiO2 prices had a $300-500/tonne increase.
Majority of producers are bullish that TiO2 prices will not halt its uptrend despite the traditional slowdown in downstream demand in the fourth quarter, market sources said.
TiO2 is mainly used as white powder pigment in the production of paints, coatings, plastics, paper, inks, fibres, food and cosmetics.
Kronos was first among international TiO2 makers to announce a $500/tonne price hike for all its products sold in Asia Pacific, effective 1 September.
Other major players such as DuPont, Tronox, Ishihara Sangyo Kaisha (ISK) and Cristal Global followed suit, with a price increase of the same magnitude taking effect from 1 October. Huntsman is also heard looking at a $500/tonne price increase.
“Titanium ore prices keep increasing in the second half of this year so we have no choice but to increase our prices,” a TiO2 producer said.
TiO2 prices have spiked by close to 40% from $2,800-3,000/tonne CFR Asia at the beginning of this year, according to ICIS data. Prices were last assessed by ICIS at $3,900-4,200/tonne CFR Asia on 9 September.
“Demand-supply balance remains tight so we are expecting to fully implement the price hike,” said another producer.
Producers have been relentlessly lifting TiO2 prices every quarter, backed by tight supply that is showing no sign of easing in the near term, given a lack of investments in new capacities outside of China, industry sources said.
Among the TiO2 producers, only DuPont is slated to expand its capacity by 350,000 tonne/year by the end of 2014. This includes a new 200,000 tonne/year production line at DuPont’s site in Altamira, Mexico, as well as facility upgrades at its existing TiO2 sites in the US, Mexico and Taiwan to yield an additional 150,000 tonnes/year capacity.
Buyers in general hold the view that there should not be a steep increase in prices because of the expected reduction in consumption in the fourth quarter.
“Q4 is typically a slow season so there is no reason why price has to go up,” said a buyer.
Some buyers said they will need less material in the October-December period.
“People are sitting on high inventory of rutile-grade TiO2 so they will reduce procurement for Q4,” said another buyer.
($1 = €0.73)
