A large North American titanium dioxide (TiO2) buyer said on Wednesday that a proposed price hike for 1 April was unjustified, given its forecast of flat-to-weaker paint sales this spring.
DuPont said it intends to raise its North American TiO2 price by another 5 cents/lb ($110/tonne, €81/tonne), effective 1 April on diminished supply and improving demand - especially in the plastics compounding market.
Suppliers said demand continued to increase steadily and was already straining low inventories despite high production rates.
The market’s typical first-quarter inventory cushion was non-existent, a source said, because sellers’ idled capacity at several plants and trimmed production rates at other sites to balance supply with poor demand during much of 2009.
Current demand has been hampered by the long US winter, a source said, but added that suppliers could get most or all of the current 6 cent/lb initiative for 1 January as winter abates.
In most cases, 90-day price protection would delay implementation of DuPont’s newest initiative until 1 July. If the January TiO2 initiatives succeed, prices would move up on 1 April for most buyers.
However, buyers had already expressed doubt that the January increases would succeed, especially after recent gains of 2-4 cents/lb stemming from late fourth-quarter initiatives.
A buyer said its paints sales were forecast flat to 2-3% down this year, and therefore it would be against any more TiO2 increases in 2010.
The paint maker did not specify which of its markets would be weakest, but architectural coatings account for most of the demand for TiO2, a white pigment also used in inks, paper and cosmetics.
Current North American TiO2 prices are 114-128/tonne, according to global chemical market intelligence service ICIS pricing.
Other North American TiO2 producers include Kronos, Cristal, Huntsman and Tronox.
($1 = €0.74)
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