key: cord-1029853-dly89d1t
authors: nan
title: TiO2 pigment prices seem to be holding up remarkably well
date: 2020-07-31
journal: Focus on Pigments
DOI: 10.1016/j.fop.2020.08.006
sha: 2f3a16f49a18d0c22ec9480ac3121a1f7bf4ed56
doc_id: 1029853
cord_uid: dly89d1t

nan

consumption of natural food colorants. Growing concerns about the possibly harmful effects of synthetic food colorants will help to foster purchasing of natural food colorants. On the other hand, the preparation of 'do-it-yourself' natural food colorants, starting with readily available plants, fruits and vegetables, is becoming increasingly popular and of course this can hinder the expansion of sales of commercial products.

According to CMI, world spending on carotenoid pigments amounted to $501 M in 2019. This segment accounted for nearly 30% of the total natural food colorants market. There are two main categories of carotenoidscarotenes (which do not contain oxygen) and xanthophylls (which do contain oxygen). Alpha-and beta-carotenes are widely used, while the most popular xanthophylls include beta-cryptoxanthin, lutein, zeaxanthin and lycopene. As well as being good pigments in the red/yellow/ orange space, carotenoids are typically antioxidants and they enhance the human immune system.

Within the Asia/Pacific region, customers spend nearly $520 M on natural food colorants. The Asia/Pacific market accounts for a 30.4% share of the global market for natural food colorants. Europe and North America account for smaller shares of the global total.

Not surprisingly, CMI's list of the world's major suppliers of natural food colorants contains some of the same names as the Meticulous Research list -Archer Daniels Midland (US); Chr Hansen (Denmark); DD Williamson (US); GNT, which is controlled by the Hoeck family (Netherlands); Kalsec (US); Lycored, part of the Adama Agricultural group (Israel); Naturex, part of the Givaudan group (France); and Sensient Technologies (US). But the CMI list also names companies that do not appear on the Meticulous Research list, namely: Roha Dyechem, part of the JJT group (India) and Symrise AG (of Germany published a multi-client report on inkjet colorants, according to which global spending on inkjet colorants was estimated at $2.7 bn in 2017. The market is forecast to expand at an average 6.5% per annum over the next eight years, reaching $4.75 bn by 2026.

TMR has also recently published a report on the global market for fluorescent pigments. For 2017, global spending on fluorescent pigments was estimated at $1.17 bn and it is projected to increase to $1.87 bn by 2027. Fluorescent pigments for printing inks accounted for 47% of the total in 2017 and consumption in this sector is expected to rise at 6% per annum over the next ten years, reaching $880 M by 2027. Asia/Pacific is the largest market region, accounting for 26% of the world total in 2018. Spending on fluorescent pigments in Asia/Pacific is growing at 7% per annum, so that it should pass the $500 M mark by 2027.

Major producers of fluorescent pigments were named by TMR as: Radiant Color NV, Ukseung Chemical Co Ltd, LuminoChem Ltd, Sinloihi Co Ltd, Huangshan Jiajia Fluorescent Material Co Ltd, Wanlong Chemical Co Ltd, Aron Universal Limited, J Color Chemicals, Vicome Corp and Wuxi Ming Hui International Trading Co Ltd.

TMR is one of several "research mills", based in the Pune region, churning out hundreds of market reports on niche sectors, apparently compiled by young graduates with little or no direct industry expertise, drawing on secondary source material. GlassDoor (the worldwide executive recruitment company) and ARPR (the global public relations firm) have expressed serious concerns about TMR's research methodology and about the quality of its published reports. Most of the major carbon black producers have cut back on output during 2020, partly because of the effect of the pandemic on their respective workforces and partly in order to align output with sales. Nevertheless, Cancarb (a whollyowned subsidiary of Tokai Carbon) is going ahead with a 9000 tonnes/y expansion of its Medicine Hat plant in Alberta, Canada. (See also 'Focus on Pigments', Mar 2019, 2-3). Also, Cabot is optimistic about earnings from its conductive carbon nanotubes business offsetting a downturn in carbon black sales, following the acquisition of Shenzhen Sanshun. (See also 'Focus on Pigments', Mar 2020, 6-7).

In early March 2020, the US Tire Manufacturers Association (USTMA) was projecting a healthy increase in US tyre shipments this year, but just over a month later it revised its forecast for 2020 shipments to 273.6 M units, representing an 18% fall on the 334 M units shipped in 2019. TiO 2 pigment prices seem to be holding up remarkably well While industrial activity has been badly affected by Lockdowns inspired by the Covid-19 pandemic throughout the entire world (See also 'Focus on Pigments', Jun 2020, 1-3), TiO 2 pigment prices seem to be holding up remarkably well. This is partly because most of the major multinationals have adjusted their plant operating rates so as to align output to sales.

Also, Chinese suppliersfaced with rising costs for feedstocks and for pollution controlhave been keen to raise their prices for both domestic market shipments and for exports. During the first two weeks of July 2020, more than 20 Chinese TiO 2 suppliers announced price increases, typically Rmb 0.50 per kilo for Chinese customers and $0.08 per kilo (fob Chinese port) for export customers. Panzhihua Taihai initiated the latest wave of price hikes on 28 June. Two of the country's top ten suppliers -Dahutong and Guangxi Jinmaofollowed suit within five days. Between 10 July and 14 July, most of the other top ten suppliers -Lomon Billions, Shandong Dawn, Anhui Annada, Shandong Doguide, CNNC HuaYuan, Jilin GPRO and Ningbo Xinfualso posted price increases.

There had been an earlier wave of attempted price increases during the second half of February and early March. Led by Lomon Billions' initiative on 11 February, followed by CNNC HuaYuan on 26 February, several Chinese suppliers declared price increases of Rmb 0.50-0.80 per kilo (for the domestic market) and $0.08-0.10 per kilo (for exports).

On 11 February 2020, Venator announced a worldwide price increase of $0.12 per kilo, due to take effect as from 1 March 2020 in Latin America and the Asia/Pacific region and as from 1 April 2020 in Europe, the Middle East and Africa. The official announcement notified parallel price rises of $0.06 per pound ($0.132 per kilo) for North America and s0.10 per kilo for Europe. On 6 March 2020, Kronos announced a worldwide price increase of $0.06 per kilo, due to take effect as from 1 April.

However, all these attempted increases essentially failed to take hold in a climate of drastically reduced industrial activity.

According to ICIS, TiO 2 demand in China was beginning to recover during May/June 2020, with Southeast Asian demand also picking up towards the end of June. By the beginning of July, Chinese domestic demand was running ahead of production and Chinese suppliers were drawing down their product inventories while plant operating rates for the small and medium-size producers were typically still of the order of 50-60%. Against this background, many of them were operating at a loss during 2Q 2020 and they were keen to raise pigment prices during 3Q 2020.

In Northwest Europe, contract prices fellin local currency termsby 3% from 4Q 2019 to about s2.40-2.70 (midpoint s2.55) per kilo in 1Q 2020 and these prices were rolled over into 2Q and 3Q. ICIS estimates that, so long as the spread of the Covid-19 virus remains under control, reasonably strong demand for architectural paints for do-it-yourself decorating projects will stimulate TiO 2 consumption. Supply to the European market will be influenced by the levels of arrivals of imports from China, but European producers will probably use their flexibility to adjust plant operating rates in order to manage the supply situation, ie making sure that product inventories do not mount to excessive levels. Meanwhile, the value of the Euro against the US dollar has risen steeply, from s0.85 at the beginning of May to s0.925 towards the end of July. In US dollar terms, the mid-point price of s2.55 per kilo was equivalent to $2.75 per kilo in early May and $3.00 per kilo by late July.

In North America, customer requirements are mainly met by the four multinationals (Chemours, Tronox, Kronos and Venator) and there is a much stronger preference for chloride-route TiO 2 grades than in other regions. Operators have turned down their operating rates in order to match the downturn in demand. Chemours and Tronox have been determined to adhere to their value stabilisation strategies. Several contractor-driven construction projects that were suspended or postponed during 1Q 2020 were reactivated in June, stimulating TiO 2 consumption for paint and plastic. The OEM automotive sector was already performing quite weakly during the second half of last year. There were some signs of recovery during June in respect of OEM automotive paints and vehicle refinishing paints, with positive impacts on TiO 2 consumption in these sectors. Overall, TiO 2 producers' inventories remained at levels equivalent to about 45-60 days' supply. The average realised price stayed at around $1.65 per pound, equivalent to $3.64 per kilo.

In their regular quarterly teleconference seminars with investment analysts, senior executives at several paint companies reported tight supplies in the TiO 2 pigment market and indicated that they expect TiO 2 pigment prices to either remain on a plateau or trend upwards slightly during the second half of 2020.

) Artikol 2020. Healthy growth in Egyptian and Moroccan paint markets, by contrast with Algeria & Tunisia From a survey of market reports from several different sources, PPCJ concluded that the paint industries in Egypt and Morocco are in robust health, whereas the paint industries in Algeria and Tunisia were in poor shape even before the onset of the Covid-19 crisis. According to Euromonitor, sales revenues generated by Egyptian paintmakers amounted to $1.164 bn in 2019. They are projected to increase to $1.339 bn in 2020 and $1.522 bn in 2021. According to Statzon, non-aqueous paint exports from Egypt amounted to $103 M

) to spend $300,000 on the expansion of its automotive paints plant at Tangier. According to Euromonitor, sales revenues generated by Tunisian paintmakers have been falling steadily for the past four years