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Report Paints a Fickle Pigment Picture

Tuesday, June 19, 2012

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The rollercoaster fortunes of titanium dioxide have thrust the world’s most popular white pigment from affordable glut to pricey scarcity in a very short time, a new market report shows.

The global price of titanium dioxide has rocketed by nearly 50 percent in the last two years and is now a $17 billion global market, according to the newly released third edition of the TiO₂ Pigment Annual Review, from TZ Minerals International.

Wikimedia Commons / Walkerma

Paint and coating producers are the largest consumers of titanium dioxide, valued for its whitening and hiding power.

And at least for now, that rollercoaster is still hurtling straight upward, carrying huge implications for TiO₂’s biggest consumers—the paint and coatings market.

Changing Fortunes

It seems inconceivable today, but global TiO₂ supplies were fat and cheap as recently as 2008, reports TZMI, an Australia-based consultant to the titanium minerals market.

At that time, the industry “operated in an environment of depressed profitability, with record-high raw material and energy costs resulting in an oversupply of TiO₂ in Western markets,” the report says.

As the global financial crisis clamped down, however, inventories of the so-called “perfect white” dwindled and production capacity by the pigment’s relatively few suppliers was slashed.

(Five global producers make up more than 56 percent of the titanium dioxide market: DuPont, Cristal Global, Tronox, Huntsman and Kronos. DuPont and Tronox operate only chloride route plants; the others operate plants that use both sulfate and TiO chloride route technologies.)

Thus, the industry—including titanium feedstock producers—was caught flat-footed when demand rebounded with the economic recovery, TZMI reports.

Scarcity Grows

Pinched between rising demand and reduced production, TiO₂ became more scarce—and rapidly more expensive—beginning in 2010 and continuing through 2011. Globally, TiO₂ prices climbed by eight percent in 2010—a year of record global demand—and by a staggering near 40 percent in 2011.

Nowhere have those shortages and high prices hit harder than in the paint and coatings industry, the largest end user of titanium dioxide.

As TZMI reports, TiO₂ is used predominantly in producing high-quality surface finishes to deliver opacity, brightness and whiteness. Although it also extends the life of the medium it is incorporated into, its main attribute is to improve a product’s aesthetic appearance by hiding and/or whitening.

As such, TZMI says, “titanium dioxide is considered to be a quality-of-life product, and consumption generally increases as disposable income increases.”

‘A Year with Two Faces’

The year 2011 “turned out to be a year with two faces” for TiO₂, TZMI says.

Demand in the first half was as strong as in 2010, led by Brazil, Turkey, Russia, India and other emerging economies. The second half of the year was bumpier, however, following the economic turbulence in Europe and abrupt tightening of credit in China.

In the fourth quarter of 2011, China’s import volumes plunged by 47 percent compared to the second quarter of 2011.

The TiO₂ Pigment Annual Review 2012 provides up-to-date commentary and independent analysis of the TiO₂ sector, including producers, end-consumers, supply-and-demand scenarios, and an outlook for coming years.