Prices continue to display real market strength
By Staff -- Purchasing, 4/9/1998
Domestic prices for rutile-grade titanium dioxide will remain under the gun through the third quarter because of tight supplies. Buyers forecast U.S. bulk contracts will increase an average of 2(cent)/lb in the next six months while spot prices will climb another penny, according to Purchasing's monthly chemical transaction price survey.Prices for rutile-grade titanium dioxide remained fairly stable for most of 1997, despite a number of price-hike attempts by producers. In the first quarter of 1997, these tags averaged 87(cent)/lb on contracts and 88(cent)/lb for spot purchases. Prices notched up a penny in the second quarter, then dropped back a penny in the third.
As the final quarter began, titanium dioxide prices began to rise as supplies tightened. Contracts moved up to an average of 89(cent)/lb, and spot tags jumped to 91(cent)/lb. In January, tags increased another 2(cent)/lb to 91(cent)/lb on contracts and 93(cent)/lb for spot purchases.
On February 1, producers boosted prices by 5(cent)/lb. DuPont increased tags for coatings, plastics, and specialty grades of its Ti-Pure titanium dioxide. Kerr-McGee hiked prices for its Tronox titanium dioxide. As a result, contracts rose to an average of 94(cent)/lb in February, and spot tags went up to 96(cent)/lb.
Titanium dioxide availability has been tight but may be getting better. Leadtimes peaked in November and again in January at an average of 2.3 weeks. In February, delivery times dropped sharply, to an average of 1.3 weeks.
Along with the February price increase, Kerr-McGee asked for 30-day leadtimes on orders because of low inventories. To help alleviate the situation, the company is planning incremental expansions at its Hamilton, Miss., plant to boost supplies.
DuPont also is adding capacity. The company is incrementally expanding its North American capacity, adding 200,000 tonnes/yr of capability. Some of these projects will likely come on-stream this year.
Also on the capacity front, there are several major mergers in the works. DuPont is acquiring Tioxide's titanium dioxide business from ICI. Kerr-McGee is buying Bayer's titanium dioxide marketing, research, and manufacturing activities at Verdingen, Germany, and Antwerp, Belgium. Millennium Chemicals recently purchased the titanium dioxide business of Rhone Poulenc's Thann et Mulouse subsidiary of Le Havre and Thann, France. The operations will be integrated into Millennium Inorganic Chemicals.
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