Global titanium dioxide producers are exceptionally active while expanding

Global titanium dioxide producers are extremely active this year. Recently, many titanium dioxide manufacturers announced the news of the third price increase during the year. While frequently increasing the selling price of products, giant companies such as DuPont are still busy with investment expansion. Other manufacturers are preparing to make big profits in response to the surge in share prices.

Due to the strong demand and insufficient supply, the market price of titanium dioxide in the world continues to rise. Recently, the titanium dioxide producer has issued a new round of price increase notice. On June 1, US DuPont Titanium Technologies and Saudi Arabian company Cristal also raised the price of North American titanium dioxide by 10 cents per pound. US producer Kronos also announced that it will increase the price of titanium dioxide products in North America by 15 cents/lb from July 1. Buyers expect that US manufacturers Huntsman and Tronox will also introduce similar price increases. Since most contract customers have a 90-day price protection period, market participants predict that the US contract price will be raised again on September 1 or October 1.

In Europe, the price of titanium dioxide has increased by 29% since the first quarter of 2010 and has recently reached 2.50 to 2.75 EUR/kg (FD, Northwest Europe). Due to insufficient production capacity but lack of raw materials and strong demand, DuPont has announced that the European contract price will be raised by 0.25 Euro/kg in the third quarter of 2011, and other manufacturers are also seeking to increase prices.

Titanium dioxide prices in Asia have risen by 200-300 U.S. dollars per ton since April, and prices are expected to continue rising in the third quarter. Kronos has announced a price increase of 300 US dollars/ton for titanium dioxide in Asia Pacific, Latin America, the Middle East and Africa, which will take effect on July 1. ISK, Japan's Ishihara Industries, also announced that it will raise the price of titanium dioxide products in the Asia-Pacific region by US$500/ton from July 1.

Faced with a serious imbalance between supply and demand, DuPont, the world leader in titanium dioxide industry, announced a comprehensive plan for the expansion of titanium dioxide production capacity in May, which will increase its global production capacity by 350,000 tons/year. Market analysts said that although this plan can maintain long-term confidence in the market, but in the three years or more, downstream buyers will continue to face downward pressure on supply and rising prices.

DuPont’s expansion plans include investing more than US$500 million in a new 200,000-ton/year production line at the Alta, DuPont, Mexico plant, and increasing investment in other titanium dioxide production plants located in different parts of the world. In addition to the expansion of existing production plants, DuPont will continue to seek other ways to increase production capacity, including continuing its commitment to advancing investment projects in Dongying, China, and focusing on development opportunities in other parts of the world. In the past five years, DuPont has increased production capacity by more than 100,000 tons/year by renovating existing facilities. Lawrence Alexander, an analyst with US investment bank Jefferies & Co, said that DuPont's new expansion plan will increase the company's titanium dioxide production capacity by 29% to 1.55 million tons per year. At present, the global titanium dioxide production capacity is approximately 5.6 million tons/year, of which high-quality titanium dioxide production capacity is approximately 4 million tons/year.

According to Deutsche Bank analyst David Begleiter, global demand for high-quality titanium dioxide grows at an annual rate of 3% to 4% (ie, annual demand increases by 120,000 to 160,000 tons/year). The expansion of energy can only meet the global demand growth of about two and a half years. A North American manufacturer stated that other titanium dioxide manufacturers outside the Asia-Pacific region have also been working hard to expand their production capacity, but on a smaller scale. In addition, capacity expansion is also limited by the ability to supply ore.

AkzoNobel announced in early June that it will cooperate with Guangxi Ka Wah Titanium Co., Ltd. to build a new 100,000-ton/year titanium dioxide production project in Qinzhou, China, which is expected to start production in early 2014. Akzo Nobel's management committee member Werner Fuhrmann, who is in charge of supply chain and procurement, said: "This time, we have established a cooperative relationship with Ka Wah Titanium. Akzo Nobel will further ensure the supply of key raw materials in Asia."

In addition to expanding production capacity, some manufacturers are also considering selling shares. Cinkarna Celje, a producer of titanium dioxide in Slovenia, is listing its 80% stake. The company operates a 56,000 tonne/year titanium dioxide plant in Celje, Slovenia. Market participants said that the current market for titanium dioxide is very good, at this time can be a good sell equity. Cinkarna's stock price was 47.75 euros on May 18 last year, and it was 90 euros on May 18 this year.

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