For the past two years, the price of Titanium Dioxide (TiO2) has increased steadily. A number of factors contributed to the current market situation however, one must be aware that the world’s Titanium Dioxide resources are running dry.
The scarcity of one of paint’s most important ingredients was further depleted when the TiO2 production plant in Finland was destroyed in a fire at the end of January 2017. This was followed by price increases in February and April by some of the world’s largest TiO2 producers.
The shortage of TiO2 is now threatening the closure of plastic manufacturers in the European Union, as there are no resources available outside of the region. The price of TiO2 locally has increased by 20% since December 2016. Mark Vergano, Chief Executive, Chemours, told investors recently that the shortage in Europe was due to unforeseen circumstances caused by shipping delays.
In China, during last year’s G8 summit, production across all sectors was halted. The Chinese government has placed restrictions on coal-fired production facilities not meeting environmental demands to help the country alleviate its own health and environmental issues.
Closer to home, TiO2 distributers have also been under pressure. Late last year South Africa’s only TiO2 plant was closed. This unfortunate closure was driven by the industry’s ability to source TiO2 outside of the country at a cheaper rate. However, due to the current global shortage, it is obvious that a local producer would have helped soften the blow for local paint manufacturers.
Local distributors of TiO2 have kept large volumes of the resource, however, paint manufacturers are placing big orders, fueling demand for the resource further, driving prices even higher.