(PRWEB) December 22, 2010
TZMI is pleased to announce the release of its sixth detailed review of the global titanium dioxide minerals market titled “Titanium Feedstock Market Dynamics: Outlook to 2018”. This study provides a detailed supply/demand review for the titanium feedstocks market incorporating analysis and insightful comment of the ensuing two years since the previous study in 2008. The study also examines industry profitability and discusses some important points to consider regarding the financial performance of the titanium feedstock sector.
With the Global Financial Crisis (GFC) seemingly behind us the outlook is for a much stronger growth in TiO2 pigment and titanium feedstock demand and TZMI feels a greater level of certainty about its forecasts in this new study for the second half of the current decade. Annual global year-on-year growth rates of TiO2 pigment are now predicted to be at least one full percentage point above the 30-year historical average of 3.1% on the back of continual strong annual growth in China and a rapidly rising base.
To complete the study, TZMI reviewed both feedstock supply and TiO2 pigment sector use on a plant-by-plant basis throughout the world. Further to this, the study provides a detailed assessment of future consumption trends for TiO2 pigment and in turn global production levels, which ultimately drives the offtake for titanium feedstocks. This comprehensive analysis forms the platform for assessment of future supply/demand balances for each individual feedstock product, which provides a far more valuable insight into future market dynamics than when considering the supply/demand outlook for feedstocks in total. An analysis is also provided of the titanium sponge industry and the important role of co-products is also considered. Since 2004, a new paradigm has emerged, as zircon and pig iron co-products have accounted for an increasing share of the industry revenue.
Global total feedstock demand is forecast to increase by 3.6 million TiO2 units to 8.8 million TiO2 units between 2009 and 2018. On an individual product basis, the largest increase in demand over the period to 2018 is expected to be for sulfate ilmenite, followed by chloride slag and then sulfate slag. The significant growth in sulfate feedstock demand reflects the situation in China where it is anticipated that most of the pigment capacity added during the period under review will be sulfate-route capacity. Rutile demand will remain strong, declining supply will, however, swing some preferred rutile users to slag, while sulfate ilmenite use will be driven primarily by China’s expanding pigment sector. Environmental considerations may ultimately drive the use of ilmenite versus slag in China, with the extent and timing for any transition away from ilmenite hard to predict.
TZMI forecasts China’s share of global sulfate-route capacity to increase from a level of 44% in 2010 to an estimated 57% by 2018. Sulfate feedstocks demand will clearly benefit, with most of this volume growth led by a considerable increase in sulfate slag demand. Chloride feedstock consumption is also expected to grow, although at a lower rate and will be dominated by high TiO2 feedstocks.
The study discusses that the most significant impact on the titanium feedstock market over the period to 2018 is expected to come from the supply-side of the equation, as this is the area with the greatest level of uncertainty at the moment in the marketplace. As such, the industry will need to focus on the sustainability of global supply to meet the future demand requirements of the sector.
Without the onset of new projects, resource depletion for existing operations will see total supply from existing producers decline to less than 6 million TiO2 units by 2018, which is below the global peak production in 2007. In tandem with resource depletion, the level of activity in investigating new sources of feedstock supply has also declined considerably in recent years and is at its lowest level since 1999.
Consumers of titanium feedstocks will need to have an awareness of associated issues discussed in the study when considering any strategy with respect to sourcing of feedstocks in the future.
For virtually all feedstock types, tight market conditions and increasing supply deficits from 2012 are suggested by TZMI’s supply/demand analyses over the next four years, unless a number of new projects can be commissioned by that date. Sulfate-grade feedstocks in particular are expected to be in tight supply over the next few years and over the long-term, even with the development of several new projects.
The global TiO2 sector is currently clearly more buoyant than at any other time in the last 10 years, supported by strong pigment market pricing. This in turn is likely to flow down to the minerals sector, where similarly sub-standard returns have been occurring for many years. Current market conditions are exacerbated by low inventory levels of pigment and current production capacity being closely matched to market demand. There will likely be some inventory build by pigment producers during the northern hemisphere winter, but this could be curtailed by pigment customers continuing to purchase inventory ahead of future price increases.
For more information or to order a copy of TZMI’s Titanium Feedstock Market Dynamics: Outlook to 2018, visit http://www.tzmi.com.
TZ Minerals International Pty Ltd (TZMI) is an independent consulting and publishing company, established in 1994, with offices in Australia, the USA, Europe, South Africa and China. TZMI is comprised of four operating divisions and subsidiaries, providing specialist services to the following industries:
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