The weighted average global pigment price decreased 2.7% year-on-year in 2009
(PRWEB) May 11, 2010
TZMI’s Pigment Price Forecast, the only independent forward-looking analysis of the prices for the titanium dioxide pigment, is published quarterly by TZ Minerals International Pty Ltd (TZMI).A detailed analysis of the global supply/ demand balance forward to 2015 is used to develop the latest 6 year regional price forecast.
In 2009, global pigment demand was estimated at 4.68 million tonnes, down 3.0% from 2008. The compound average growth rate (CAGR) of pigment demand over the five year period to 2008 has been below the long term average. From 2003-2007 the CAGR was 3.6%, however, the 4.9% year-on-year drop in 2008, followed by the further decrease in 2009, diminished the six-year CAGR to only 0.7%. As the Chinese demand base increases, global year-on-year growth rates are expected to remain above the long-term average of 3.1% per annum. In the six years to 2015, global TiO2 demand is expected at a CAGR of 4.3%, buoyed by strong demand growth in Asia-Pacific and a significant supply chain restocking from a recent inventory nadir in 2009.
Regionally, the main consuming markets for TiO2 pigment are the major industrialised economies of North America, Europe and the increasing role for China. Per capita consumption is highest in North America and Western Europe. The greatest opportunities for growth lie in the less developed high population economies, led by China and India.
Demand for pigment in Asia-Pacific is expected to grow from 1.81 million tonnes in 2009 to 2.51 million tonnes by 2015, a CAGR of 5.6%. China is expected to account for more than 63% of the incremental demand growth within Asia-Pacific to 2015 and 34% of the global incremental demand over the same period.
Chinese producers are expected to continue their rampant production growth, fuelled by much lower capital costs and an acceptance of tighter margins by the plant owners. Capacity utilisation rates at the Chinese plants are also expected to increase as technology improves. As a consequence, this will lead to higher pigment quality, with more Chinese production becoming acceptable in wider markets. TZMI also believes that further consolidation amongst the global producers is likely within two years.
The weighted average global pigment price decreased 2.7% year-on-year in 2009. There is little chance of new unidentified investment in additional brownfields capacity during 2010 and early 2011, resulting in at least another two year period before significant additional capacity can become available. The result is likely to be a very strong rebound in pigment prices in all markets in 2010 and 2011, before some tempering in the rate of increase from 2012. TZMI is forecasting weighted average global pigment prices to increase in nominal US dollar terms around 2.8% CAGR to 2015.
The Pigment Price Forecast Q1 2010 includes an in-depth analysis of regional pigment trade for the period 2001 to 2009, extracted from TZMI’s proprietary database.
The Pigment Price Forecast Q1 2010 is developed concurrently with TZMI’s Global TiO2 Pigment Producers Comparative Cost and Profitability Study, the benchmark analysis of the leading industry producers. The study covers over 60 pigment plants spread across 27 countries and covers over 90% of the 2009 output. The study is an independent analysis built up from individual plant cost structures plus an analysis of global pigment trade during 2009. This year’s study also addresses the indicative cost structures in 2013 and relates this forecast to the required regional pricing to maintain or increase profitability.
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