Classic Special Update: TiO2 Price and Supply Situation

Classic Market Research Team is of the view that supply of titanium dioxide is expected to remain tight for the next two years, those manufacturers who thought that prices will fall after January 2021 may be proved wrong, we are entering an era of medium term price increase at least for a foreseeable future.

It may sound strange but the fact is that Titanium raw material resources are exhausted, grades are declining, capital expenditures are lacking, and supply entered a downward turning point by the end of 2020. Please remember that Titanium Dioxide is produced from concentrated ilmenite also known as the CR4. Global ilmenite resources are depleting and controlled by mining companies in Australia, Canada, India, South Africa and Kenya, These five countries account for 77.50% (see the chart above) of the global reserves and supplies remaining comes from China that too is of inferior quality meaning that usable mineral concentrate is low. There are four contributing factors that give credence to this view, the supply situation of raw material will remain tight of ilmenite and will be of inferior quality - adding to the production cost. The ocean freight cost is already at 15 years high, owing to unavailability of containers that are stuck in Europe and North America, the situation is not going to change in the next 3 months hence adding US$80-100/ MT to the Cost. In China, Environmental Compliance issues will resurface further suppressing the production and the supply. Finally, annual maintenance of plants, and COVID-19 closures in Europe are also contributing to the TiO2 supply shortages and uncertainty. Our recommendation is to plan ahead, and act now.

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