Recently, IHS Markit released the latest report on titanium dioxide. According to the report, the global titanium dioxide market will continue to grow at an average annual rate of 3.5% from 2014 to 2019. Asia leads the increase in consumption under China's lead, and Asia needs during that period. The average annual growth rate is 5%.
At the same time, the titanium dioxide market will be further consolidated, and the increase in M&A activity will further reduce the number of manufacturers, and market prices are expected to continue to rise.
Global titanium dioxide market will continue to grow at an average annual rate of 3.5% by 2019
Market continues to integrate
US Tenova announced on February 21 that it will acquire Saudi Costre’s business for US$1.7 billion and is expected to create one of the largest and most integrated new leading companies in the world. The combined company will operate 11 titanium dioxide plants in eight countries in the world, with a total capacity of 1.3 million tons/year, which is more than the Kemu company that was spun off from DuPont.
Koster is currently the world's second largest producer of titanium dioxide, with a production capacity of 860,000 tons per year, and Tenova is the world’s sixth largest producer of titanium dioxide, with a capacity of 470,000 tons per year. The acquisition is expected to be completed before the first quarter of 2018 and is still pending regulatory approval.
Samatha Wietlisbach, an analyst at IHS Markit, stated that from the 2015 to the first half of 2016, the global price of titanium dioxide was weak and the profit margin of manufacturers was low, which promoted the consolidation of the industry. “In a low-margin market environment, saving costs is critical. Large companies that have integrated upstream raw material production have more advantageous raw material prices and can take advantage of market competition,†she said. In addition, other factors that promote industry consolidation include that China has become a major producer of titanium dioxide in the world, and its supply continues to increase.
Huntsman is currently stripping the titanium dioxide business and will later operate independently with Venator Materials. Venator Materials Inc. will include its pigments business and Titanium Dioxide Assets acquired from Lockwood for $4 billion in 2013, with a capacity of 788,000 tons/year, accounting for approximately 11% of the world's titanium dioxide production capacity. This stripping is expected to take place this year. Completed in the second quarter.
Drive prices higher
Jefferies Group analyst Lawrence. Alexander said that the purchase of Kotez by Tener will support the further increase in the price of titanium dioxide.
Huntsman continued to raise the price of titanium dioxide in the second and third quarters of 2016, and the price rose by about US$300/ton, prompting a steady increase in global titanium dioxide prices in 2016. At present, the company is pushing up the price of titanium dioxide in the second quarter of this year.
TZ Minerals International expects that the market price of high quality titanium dioxide will increase by US$319/ton from June 2016 to the end of 2017. Fitch Rating also believes that the price of titanium dioxide will continue to rise.
Wietlisbach said that from the perspective of supply and demand, the global titanium dioxide market will be more balanced, and the end market demand is stable. It is expected that the price of titanium dioxide will continue to rise in 2017 and early 2018. After this wave of price increases, the price of titanium dioxide may tend to stabilize in the next few years, but it is “unlikely†to reach a high price of US$3.6/kg set in 2011-2012.
Demand shifts to Asia Pacific
Fitch Ratings pointed out that the titanium dioxide industry has suffered from overcapacity in recent years, but it is currently recovering. In the past two years, some capacity shutdowns have effectively solved the problem of global oversupply.
Huntsman recently announced plans to close white-end processing and packaging operations at its titanium dioxide production plant in Calais, France, in the third quarter of 2017 to further optimize its manufacturing network. The company closed its Umbogintwini production facility in South Africa in the fourth quarter of 2016. At the same time, Huntsman's titanium dioxide plant in Pori, Finland, was not able to fully resume production after a fire on January 30. It is currently only capable of producing small quantities of products. It is expected that the plant will be fully operational by the end of 2018. Pori base titanium dioxide production capacity of 130,000 tons / year, accounting for about 15% of Huntsman titanium dioxide production capacity, accounting for about 2% of global demand.
From the perspective of regional demand, demand has shifted to the Asia-Pacific region due to the fact that the economies in Europe and North America have caused the market to become saturated. The Asia-Pacific region has become the world’s largest consumer market for titanium dioxide due to growing population and disposable income. China has become the world’s largest consumer of titanium dioxide, accounting for nearly one-third of global demand in 2016. IHS Markit also stated in the forecast report that the average annual growth rate of titanium dioxide in China from 2014 to 2019 is 5.6%, and the consumption of titanium dioxide in China in 2019 will reach 2.85 million tons. In addition, in 2016 China also replaced the United States as the world’s largest exporter of titanium dioxide pigments. However, China’s exports of titanium dioxide are usually lower grade products.
At the same time, the titanium dioxide market will be further consolidated, and the increase in M&A activity will further reduce the number of manufacturers, and market prices are expected to continue to rise.
Global titanium dioxide market will continue to grow at an average annual rate of 3.5% by 2019
Market continues to integrate
US Tenova announced on February 21 that it will acquire Saudi Costre’s business for US$1.7 billion and is expected to create one of the largest and most integrated new leading companies in the world. The combined company will operate 11 titanium dioxide plants in eight countries in the world, with a total capacity of 1.3 million tons/year, which is more than the Kemu company that was spun off from DuPont.
Koster is currently the world's second largest producer of titanium dioxide, with a production capacity of 860,000 tons per year, and Tenova is the world’s sixth largest producer of titanium dioxide, with a capacity of 470,000 tons per year. The acquisition is expected to be completed before the first quarter of 2018 and is still pending regulatory approval.
Samatha Wietlisbach, an analyst at IHS Markit, stated that from the 2015 to the first half of 2016, the global price of titanium dioxide was weak and the profit margin of manufacturers was low, which promoted the consolidation of the industry. “In a low-margin market environment, saving costs is critical. Large companies that have integrated upstream raw material production have more advantageous raw material prices and can take advantage of market competition,†she said. In addition, other factors that promote industry consolidation include that China has become a major producer of titanium dioxide in the world, and its supply continues to increase.
Huntsman is currently stripping the titanium dioxide business and will later operate independently with Venator Materials. Venator Materials Inc. will include its pigments business and Titanium Dioxide Assets acquired from Lockwood for $4 billion in 2013, with a capacity of 788,000 tons/year, accounting for approximately 11% of the world's titanium dioxide production capacity. This stripping is expected to take place this year. Completed in the second quarter.
Drive prices higher
Jefferies Group analyst Lawrence. Alexander said that the purchase of Kotez by Tener will support the further increase in the price of titanium dioxide.
Huntsman continued to raise the price of titanium dioxide in the second and third quarters of 2016, and the price rose by about US$300/ton, prompting a steady increase in global titanium dioxide prices in 2016. At present, the company is pushing up the price of titanium dioxide in the second quarter of this year.
TZ Minerals International expects that the market price of high quality titanium dioxide will increase by US$319/ton from June 2016 to the end of 2017. Fitch Rating also believes that the price of titanium dioxide will continue to rise.
Wietlisbach said that from the perspective of supply and demand, the global titanium dioxide market will be more balanced, and the end market demand is stable. It is expected that the price of titanium dioxide will continue to rise in 2017 and early 2018. After this wave of price increases, the price of titanium dioxide may tend to stabilize in the next few years, but it is “unlikely†to reach a high price of US$3.6/kg set in 2011-2012.
Demand shifts to Asia Pacific
Fitch Ratings pointed out that the titanium dioxide industry has suffered from overcapacity in recent years, but it is currently recovering. In the past two years, some capacity shutdowns have effectively solved the problem of global oversupply.
Huntsman recently announced plans to close white-end processing and packaging operations at its titanium dioxide production plant in Calais, France, in the third quarter of 2017 to further optimize its manufacturing network. The company closed its Umbogintwini production facility in South Africa in the fourth quarter of 2016. At the same time, Huntsman's titanium dioxide plant in Pori, Finland, was not able to fully resume production after a fire on January 30. It is currently only capable of producing small quantities of products. It is expected that the plant will be fully operational by the end of 2018. Pori base titanium dioxide production capacity of 130,000 tons / year, accounting for about 15% of Huntsman titanium dioxide production capacity, accounting for about 2% of global demand.
From the perspective of regional demand, demand has shifted to the Asia-Pacific region due to the fact that the economies in Europe and North America have caused the market to become saturated. The Asia-Pacific region has become the world’s largest consumer market for titanium dioxide due to growing population and disposable income. China has become the world’s largest consumer of titanium dioxide, accounting for nearly one-third of global demand in 2016. IHS Markit also stated in the forecast report that the average annual growth rate of titanium dioxide in China from 2014 to 2019 is 5.6%, and the consumption of titanium dioxide in China in 2019 will reach 2.85 million tons. In addition, in 2016 China also replaced the United States as the world’s largest exporter of titanium dioxide pigments. However, China’s exports of titanium dioxide are usually lower grade products.
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