Coatings Producers Feel The
Weight Of TiO2 Price Hikes
by Sean Milmo
European Correspondent
milmocw@rodpub.com
Sachtleben’s
takeover of crenox
shakes up TiO2
market.
Despite the booming profits of TiO2 pro- ducers in Europe, they still want to di- versify their portfolio into speciality
pigments to ensure higher profit margins in the
long-term.
This switch into specialities is causing concern among Europe’s coatings producers at a
time when they have to struggle with rising
TiO2 prices due to current imbalances between
supply and demand for the pigment.
These anxieties have been heightened after
the announcement by the German-based TiO2
producer Sachtleben Chemie that it is taking
over crenox, another German TiO2 producer. It
was placed in administration three years ago
when Tronox, its U.S.-based parent, filed for
32 | Coatings World
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Chapter 11 bankruptcy protection.
Sachtleben, a joint venture between Rockwood Holdings of the U.S. and Kemira of Finland, is primarily a speciality TiO2 producer
with around 240,000 metric tons of annual capacity at two plants in Duisburg, Germany, and
Pori, Finland.
Crenox has a 107,000 tons a year plant at
Krefeld so its acquisition will considerably
strengthen Sachtleben’s position in the European
TiO2 market, in which the other main players
are DuPont, Cristal, Huntsman, and Kronos.
However crenox is primarily a commodity-type TiO2 producer whose main outlet is the coatings market. Furthermore both Sachtleben and
crenox use the sulphate process, which is particularly suitable for the production of specialities.
The acquisition could result in a further decrease in production capacity available for
commodity-priced TiO2 for coatings at a time
when supply has not been keeping up with demand. Consequently prices for the pigment
have risen by around 50 percent since early
last year with analysts predicting further rises
in the second half of 2012.
TiO2 capacity in Europe has been under pressure since a steep drop in demand in the aftermath of the financial crisis in 2008 led to the
closure of some uneconomic plants in the region.
Producers of the pigment have reported that they
have been sold out over the last two years.
There have been small recent increases in capacity due to debottlenecking. But there appears
to be little prospect of entirely new capacity
being built in Europe over the next several years.
Even with the steep rises in TiO2 prices over
the last two years, which has pushed up operating margins to around 30 percent, producers are
wary about investing large sums in new plants.
There are signs that TiO2 prices are beginning to flatten out in the wake of a slow-down
in economic growth in Europe, with some large
economies going into double-dip recessions.
Then the producers themselves face a
squeeze on their margins from rising costs in
their raw materials. Suppliers of titanium-con-taining ores like ilmenite have been pushing
through steep price rises in the wake of shortages following a lack of investment in mining
