Updated to mid-May 2009
 

Asian market review by Hunwei Ng, ICIS pricing

Asian titanium dioxide (TiO2) prices declined by almost 10% to around $2,300/tonne CFR (cost and freight) Asia in the three months starting mid-February on the back of sluggish demand and ample supplies. After buyers rejected any efforts to raise quarterly contract prices, producers privately negotiated price decreases for some of their customers amid rapidly deteriorating economic conditions.

Financial woes continued to plague some TiO2 producers, sparking bankruptcy rumours. With the industry in general floundering in red ink, some market players foresaw a restructuring process that would weed out weaker producers.
 
Sellers spied a ray of optimism in May on the back of a pick up in enquires. It remained to be seen, however, if this was the result of genuine market recovery or a short-lived restocking process, industry sources said.

European market review by Stephanie Wilson, ICIS pricing

Buyers and sellers locked horns over movements in the traditionally stable European TiO2 contract market. While consumers were pushing for decreases of €50/tonne in the second-quarter, producers attempted to hold prices stable, reiterating that prices must remain stable if they were to survive the tightening financial conditions.

Manufacturers continued to pull back operating rates and began to offload large inventories onto the spot market. As a result, contract prices held reasonably steady, only sustaining losses of €20/tonne, edging down from €2,100-2,290/tonne FD (free delivered) NWE (northwest Europe) to €2,080-2,270/tonne FD NWE.

In the spot market, however, downward pressure was evident, with sellers reportedly offering net prices around €1,600/tonne FD NWE. Although there was no confirmation of such numbers from the sell-side, one or two suppliers acknowledged that low one-off spot deals were available, but questioned the reported price.

Looking ahead to June, several manufacturers reiterated that current pricing was unsustainable. Key producer Kronos announced that it planned to implement a hike of €75/tonne from 1 June for all grades on the back of an upswing in demand of around 5% and others were said to be contemplating enforcing similar prices depending on the market reaction.

Buyers, however, rejected arguments to the increase on the basis that prices had not decreased in line with other commodities.

Ailing producer Tronox filed for bankruptcy protection at its German operations. 

North American market review by Larry Terry, ICIS pricing

While the North American TiO2 market was quiet during the three-month period leading up to mid-May, it was interrupted by some isolated reductions in 3 cents/lb ($66/tonne) fuel surcharges to some customers in the plastics compounding and industrial coatings sector. 

But late in the period, an architectural and industrial coatings manufacturer was granted a 3 cents/lb reduction, retroactive to 1 May. At the same time, two producers announced summer price-increase initiatives of 2-4 cents/lb.

While buyers argued that low demand and oversupply would doom any near-term price-hike initiatives, sellers insisted that demand is up and that there is no longer much excess inventory in the market. Both sides of the market noted elevated buying interest, but the market had yet to determine whether it was an uptick in demand or simply restocking of inventory depleted earlier in the year.

Reference: www. tio2.net.cn