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China has become the main driving force for the increase of
TIME:2019-07-08 READING:

IHS Markit recently released its latest report on titanium dioxide. It said that the global titanium dioxide market will continue to grow at an average annual rate of 3.5% from 2014 to 2019. Asia, led by China, will be the main driver of consumption growth, with an average annual growth rate of 5% during the period.
At the same time, the titanium dioxide market will be further integrated. The increase of mergers and acquisitions will further reduce the number of producers, and the market price is expected to continue to rise.
The global titanium dioxide market will continue to grow at an average annual rate of 3.5% by 2019.
Continuous Market Integration
Teno announced on February 21 that it would acquire Saudi Costa's business for $1.7 billion, which is expected to create the largest and most integrated new leading company in the world. The combined company will operate 11 titanium dioxide plants in eight countries worldwide, with a total capacity of 1.3 million tons per year, surpassing the Cormuir Company, which was spun off from DuPont.
Coster is the world's second largest producer of titanium dioxide with a production capacity of 860,000 tons per year, while Teno is the world's sixth largest producer of titanium dioxide with a production capacity of 470,000 tons per year. The acquisition is expected to be completed by the first quarter of 2018 and is pending regulatory approval.
Samantha Wietlisbach, an analyst at IHS Markit, said that between 2015 and the first half of 2016, global titanium dioxide prices were weak and producers'profit margins were low, driving industry consolidation. "In a low-margin market environment, cost savings are critical. The big companies that have integrated into upstream raw material production have more advantageous raw material prices and can take a favorable position in the market competition, "she said. In addition, other factors driving industry integration include that China has become a major producer of titanium dioxide in the world, and its supply is increasing.
Huntsman is currently spinning off its titanium dioxide business and will operate independently with Venator Materials. Venator Materials will include its paint business and titanium dioxide assets acquired from Lockwood for $4 billion in 2013, with a capacity of 788,000 tons per year, accounting for about 11% of global titanium dioxide production capacity. The stripping is expected to be completed in the second quarter of this year.
Drive up prices
Lawrence, an analyst at Jefferies Group. Alexander said Teno's acquisition of Coster would support a further increase in the price of titanium dioxide.
Huntsman raised the price of titanium dioxide continuously in the second and third quarters of 2016, and the price rose by about 300 US dollars per ton, which contributed to the steady rise of global titanium dioxide price 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 the global market price of high-quality titanium dioxide to rise by $319 per ton from June 2016 to the end of 2017. Fitch also believes that the price of titanium dioxide will continue to rise.
Wietlisbach said that the global titanium dioxide market will be more balanced in terms of supply and demand, while the terminal market demand is stable, and the price of titanium dioxide is expected to continue to rise in 2017 and early 2018. After this wave of price increases, the price of titanium dioxide may stabilize in the next few years, but it is "unlikely" to reach the high price of $3.6 per kilogram set in 2011-2012.
Demand shifts to Asia-Pacific
Fitch Rating points out that the titanium dioxide industry has been hit by overcapacity in recent years, but is now recovering. Over the past two years, some capacity closures have effectively solved the problem of global oversupply.
Huntsman recently announced plans to close white-end processing and packaging operations at the titanium dioxide 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, failed to fully resume production after the fire on January 30, and only a small number of products can be produced at present. It is expected that the device will be fully operational by the end of 2018. Pori has a capacity of 130,000 tons per year, accounting for about 15% of Huntsman's titanium dioxide production and about 2% of global demand.
From the point of view of regional demand, demand has shifted to the Asia-Pacific region due to the saturation of markets due to the contraction of European and North American economies. The Asia-Pacific region has become the world's largest consumer market of titanium dioxide due to the growing population and disposable income. China has become the world's largest consumer of titanium dioxide, accounting for nearly one third of global demand by 2016. IHS Markit also said in its forecast report that the annual growth rate of composite titanium dioxide in China was 5.6% from 2014 to 2019, and the consumption of titanium dioxide in China would reach 2.85 million tons in 2019. In addition, in 2016, China 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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