Titanium dioxide: "World demand shows a far from stable pattern"

The latest classification of
in
form of TiO 2 and the price of pigments have been plaguing the coatings industry. Artikol's Reg Adams talks about the current state of the market and how buyers respond to price fluctuations.
interview: "The world titanium dioxide chart of the year
2
demand shows a far from stable pattern

. "
the titanium dioxide market recently?"
Adams: The
industry consumed nearly 3.5 million tons of TiO
2
in 2019, accounting for 55% of the world's total consumption. Per capita TiO
2
consumption in most industrialized countries is in the 2.0-4.0 kg range, while in most emerging markets and less developed economies, per capita TiO
2
consumption is less than 1.5 kg. Over the past 40 years, TiO
2
's long-term long-term demand has grown by an average of 3.05 per cent per year, which is actually higher than the real growth in long-term GDP and largely reflects the excess growth in consumption of plastic and specialty decorative paper.
, however, the world's annual
2
of demand shows a far from smooth pattern. Over the past 40 years, 12 years have seen year-on-year growth of more than 5 per cent, compared with negative growth in 11 years. Fluctuations in demand growth have been particularly pronounced over the past decade. "Typically, the increase and decrease in inventories throughout the value chain exacerbates "normal" cyclical growth." During periods of price increases, consumers tend to order TiO
than
demand to "beat the next price increase". They rely on accumulated inventory and then delay the release of new orders during the fall in prices.
Senior Executives
of all major multinationals, TiO
2, reported the longest long-term sales decline in living memory, which they attributed in part to overall macroeconomic weakness and partly to consumers, particularly paintmakers, reducing Tio
2's
inventory.
Reg Adams, founder of Artikol. He will also speak at the European Coatings TiO Forum 2
2
29.
outlook for 2020 and 2021 should be brighter: the IMF forecasts global GDP growth of 20 per cent in 2020 and 2.9 per cent in 2021. Against the backdrop of rising business and consumer confidence, rising levels of construction activity, investment and household spending, and increased demand for paints, plastics and decorative laminates should lead to a rebound in world tiO
2
pigment consumption. Some industry watchers and participants expect demand to grow at a rate of 5% or more a year over the next few years. Artikol forecasts 4.6 per cent in 2020 and 4.7 per cent in 2021, with world tiO
2
consumption reaching 6.75 million tonnes by 2021.
proposal to classify titanium dioxide as a possible carcinogen has affected or is about to affect the market?
Adams:
In Europe, great concern has been expressed about the effectiveness and relevance of individual toxicology studies conducted in 1985 and 1995, suggesting that prolonged exposure to TiO
2
dust clouds can lead to lung tumors in rats. On the basis of these studies, the European Commission proposes to classify
2
in powder form as
2
2 carcinogens. This means that powdered TiO
2
products must be packaged with a label with a cancer warning icon and a specific warning tone, which may be the case with some powder coatings.
will this prevent TiO
2
from
customers from containing paint, thus cushioning the future demand potential of TiO
2
? The most famous precedent for judging this is California's Proposition 65, which requires cancer warning labels for products that contain or may produce TiO
2
particles in air sizes of 10 microns or less. These products include aerosol sprays for hair dyes or car patches, as well as products sold in powder form for cosmetics, artist's pigments, food coloring, etc. California's labeling law was enacted in September 2011. Since then, the presence of cancer warning labels has undoubtedly damping effects on TiO
2food and cosmetics, but has had little impact on aerosols or powder coatings.
from the paint manufacturer's point of view, there are no viable technical alternatives to TiO2 that can be used in coating formulations without seriously adversely affecting the performance
coating
. The honest answer to this question, therefore, is that legislation is unlikely to have any significant negative impact on future potential demand growth in the coatings industry.
buyers cope with price fluctuations
TiO
2?
Adams: In the last business cycle,
the average benchmark price for standard Goldstone TiO
2
pigments delivered to customers in western and northern Europe rose 90 per cent from 2.20 euros per kilogram in mid-2009 to a peak of 4.16 euros per kilogram in the third quarter of 2011 and then dropped to a new low of 1.96 euros per kilogram in the first quarter of 2016. In the current business cycle, the average benchmark price has risen by more than 50 per cent from 1.96 euros per kilogram, peaked at 2.985 kilograms in the second quarter of 2018, and then steadily declined, but at a rather slow pace, reaching 2.60 euros per kilogram by the end of 2019.
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Event Tip
:
28-29 January, Mr.
Reg Adams will also speak at the
European Coatings 2
Forum. Pigments will be studied from a technical perspective, but alternatives and innovations in this area will be explored.
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the main difference between the 2009-2016 business cycle and the current business cycle is that multinational suppliers have been carefully adjusting their plant operating rates to sales trends to avoid accumulating excessive inventory. The second important point is that since the beginning of 2016, China's major TiO
2
producers have faced greater government scrutiny over pollution controls at their factories, so their unit operating costs and pigment sales prices are now higher than their Western counterparts.
To address consumer concerns about price volatility, Chemours pioneered the Value Stability Program at the end of 2017, offering long-term contracts at fixed prices and adjusting Tronox and Ventor based on predetermined independently determined indices to provide long-term contracts denominated in inflation, which Tronox calls "margin stabilization programs." Venator says it is "a tailor-made approach to reducing price volatility." "So far, there have been pretty good options. For typical buyers of TiO
2
, North American customers in the coatings industry receive fewer of these long-term contracts, while European customers accept fewer long-term contracts and the least of all customers in Asia and Latin America.
In a paint manufacturing company, a long-term purchase contract with satisfactory price and quantity commitments provides a considerable advantage in terms of predictable cash flow, reduced risk and valuable management time that could have been used to bargain with suppliers. Past.
the depletion of high-grade titanium deposits particularly affect the market price of tiO
2
2 pigments in tiO2
2
value chain?
Adams:
ingredients containing tiO
2
for the manufacture of TiO 2
2
come in many forms. Natural minerals are available: redstone (TiO
2
90-96%), secondary xylene (TiO
2
70-91%) and titanium iron ore (TiO
2
45-63%). Then there are the purified raw materials, which are obtained from smelting and/or chemical processing of titanium iron ore: titanium dioxide slag (TiO
2
with a content of 75-95%) and synthesized (TiO
2
with a content of 92-94%). TiO 2 pigment
the
the world uses chloride processes (involving the use of chlorine) or sulfates (involving the use of sulphuric acid). Manufacturers usually use mixtures of different raw materials from different sources, the composition of which is adjusted according to the price of a single raw material, the desired pigment yield, the marketability of by-products, waste disposal standards, etc.
with a long history of mature mines are now facing a decline in the taste of open ore, where the percentage of titanium and other valuable minerals is declining. New deposits under consideration are often of lower quality ore, with more mules to be removed, and they are usually located in areas with higher political risks. As a result, mining companies are looking for raw material projects with higher capital and operating costs, which will require higher long-term prices for titanium, redstone and zircon to achieve a significant return on investment.
, the mining industry as a whole has been relatively reluctant to invest in exploration, with the result that no new deposits of real importance have been discovered in recent years. As a result, supply and demand for all different types of TiO
2
raw materials have been well balanced throughout 2018/19, with short-term shortages due to accidents at various mines and smelters or power outages caused by labour problems. Raw material prices are currently relatively high and are expected to grow by at least 1 per cent a year over the next decade or more. TiO
2
manufacturers are unable to fully absorb cost increases and therefore generate a constant upward pressure

on TiO2 pigment prices.
interview was conducted by Vanessa Bauersachs
.