Global Titanium Dioxide Pigment Market Still Struggling: TZMI Reports in Its Comprehensive Benchmark Analysis of the Industry

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The multi-billion dollar global titanium dioxide pigment industry experienced the double impact of price declines and significantly eroded margins in 2013, with figures that TZ Minerals International Pty Ltd (TZMI) believes are down significantly from the record earnings experienced in 2011.

Global TiO2 Pigment Producers Comparative Cost and Profitability Study

TZMI believes there is soon to be a large push of Chinese usable quality TiO2 pigment into Europe

The multi-billion dollar global titanium dioxide pigment industry experienced the double impact of price declines and significantly eroded margins in 2013, with figures that TZ Minerals International Pty Ltd (TZMI) believes are down significantly from the record earnings experienced in 2011.

In the 10th edition of the Global TiO2 Pigment Producers Comparative Cost and Profitability Study, TZMI announced that, according to its annual independent in-depth analysis of the global TiO2 sector, the industry was heavily influenced by a number of factors including:

  •     The emergence and increasing influence of Chinese producers;
  •     The slow recovery of the global economy and resultant impacts to commodity prices;
  •     Substantial changes to titanium feedstock supply/demand fundamentals;
  •     Capacity changes and shift in location/technology; and
  •     Further consolidation announcements or proposed spin-off plans.

TZMI notes that despite these factors, and better performances in the second half of 2013, the decline in sales prices more than offset manufacturing cash cost declines to lower overall profitability.

European TiO2 pigment customers would be interested in the expected closure of the Huntsman acquisition of Rockwood. TZMI believes this could lead to at least one plant closure in Europe, therefore, the study provides a keen understanding of the competitiveness of certain plants within a supplier portfolio. The first point of analysis should be the comparative cost structures of each plant in the region.

In addition, there is discussion of the price and cost deltas between China and Europe, which are currently significant. TZMI believes there is soon to be a large push of Chinese usable quality TiO2 pigment into Europe and provides a view on selected Chinese suppliers and the cascading impact of Chinese imports on the viability of European pigment plants.

TZMI’s TiO2 Pigment Comparative Cost & Profitability Study 2014 delivers a clear comparable analysis between the pigment plants (costs and profitability) in these two regions together with the large production base in the Americas.

In addition to analysis of 2013 costs and profitability, cost curves through 2018 are provided, which is helpful in understanding the key price drivers for the sector with analysis of production sites that now account for more than 99% of cumulative global supply.

Clients will receive a deeper understanding of cost drivers, which are different for each region and technology. In the 2014 edition, 21 chloride process plants are reviewed, representing 100% of the global chloride output in 2013. Another 40 sulfate process plant sites are also analysed, including a select number of sites in China. TZMI also provides an estimate of costs for a collection of smaller Chinese production sites in order to more accurately represent the total cost curve.

In 2013, TiO2 pigment producers experienced a decrease in average revenue per tonne, a decrease in manufacturing costs and the impact of declining prices for sulfate feedstocks which made a significant contribution to both global price erosion and a reduction in chloride technology cost advantages. DuPont retained its overall top position with the strongest portfolio and a clear cost and profitability over other producers. In 2013, 8 of the top 12 most profitable plants were controlled by global producers DuPont, Cristal and Huntsman, while 4 of the 12 were Chinese sites.

TZMI’s annual release of its Global TiO2 Pigment Producers Comparative Cost and Profitability Study is the benchmark analysis of the leading industry producers and includes an Excel file containing detailed plant manufacturing statements.

The global TiO2 pigment industry is extremely opaque, with cost and production information tightly controlled by most producers, at a time when the industry is encountering significant cost pressures. This study is an independent analysis built up from individual plant cost structures plus an analysis of global pigment trade during 2013, providing a comparative analysis of the industry, using a consistent standard methodology.

Orders for Global TiO2 Pigment Producers Comparative Cost and Profitability Study 2014 are now being taken. For more information please visit http://www.tzmi.com or call +1 281 687 8669.

About TZMI

TZ MINERALS INTERNATIONAL (TZMI) is a specialist advisory services company for opaque mineral and chemical markets. Established in 1994, the head office is located in Perth (Australia) and other offices in Shanghai (China), Houston (USA) and Durban (South Africa).

TZMI partners with clients from the private and public sectors to provide bespoke solutions across markets and strategic services and technical and engineering services. Our clients range from the world’s 500 largest companies through to mid-sized companies and small businesses. TZMI regularly releases market reports and periodicals on relevant subject matters which support the consulting activities and ensure up-to-date, high quality and comprehensive data, analysis and information is provided.

Enquiries:
Eric Bender
VP – The Americas
TZMI Inc
+1 281 956 2500    
ebender(at)tzmi.com

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Tracey Kelly
TZMI
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