There can be few chemicals as misunderstood or as little known about by the general public as Titanium Dioxide. Which is strange given that we are rarely more than three metres away from it at anytime in our lives.
It is an incredibly versatile chemical, that can be found in everything from paints to paper, sunscreen to plastic. And yet such is TiO2’s noteriety, that it is perhaps most famous for where it can’t be found, when media pressure against Dunkin Donuts, forced the snack producer to remove it as an ingredient. Such is the chemical’s usefullness that it had been added to the powered sugar, as CNN reported at the time, “to make the powdered sugar appear brighter”.
Yet what is strange again, is that a product that is so important for today’s consumerist world should have a price that fluctuates so greatly. This is especially true given that is has such widespread availability, sourced as it is from ilmenite, and has four well-established, big name producers, in Kronos Worldwide, DuPont, Cristal Global and Tronox Limited (plus a further host of smaller manufacturers). These big four, according to the International Business Times, “account for over 50 percent of the global net production volumes.”
Amongst a myriad of other reasons, in the past twenty years, prices have been held high by an increase in the use of sunscreen. Also having an effect was the increase in demand for Solar panels, a trend that is expected to continue. A view supported by market research consultants, Grand View Research, which stated that, “the mineral (TiO2) is expected to experience a rise in demand from the growing photovoltaic modules industry.”
Further price pressure has come from China, through its phenominal growth as a consumer of plastics, paints, paper and just about everything else.
Yet in the bizare world of Titanium Dioxide pricing, at the same time, China also caused downward price pressure. This was due to it’s construction boom that increased the demand for iron, thus increasing iron production. This in turn aided Titanium Dioxide production, as Paint and Coatings Magazine explains, “China’s imports of approximately half a million tonnes, while making up a large part of global demand, have declined in recent years. The reason for this is the prodigious rate at which Chinese miners are producing ilmenite. Much of the mineral is sourced from Sichuan province where it is found together with magnetite. The high iron ore prices that prevailed when the magnitude of China’s construction boom took everyone by surprise have allowed some of the larger Chinese miners to produce very low-cost ilmenite.”
Today, prices still fluctuate greatly. Analysis by market researchers CCM, shows that prices in China “have been rising steadily since March, with rutile TiO2 prices increasing 4.8% between late February and June 1, while anatase TiO2 prices rose 6% over the same period.”
Purchasers hope that prices have reached a peak, now that high prices have made production expansion more viable. So that there are a now a number of newly opened and pending manufacturers, including, as the International Business Times reports, “significant contributions from smaller producers in the near future (as well as) White Mountain Titanium Corp, which is expected to join global commerce in 2017, (and) is now gaining industry reputation for its works on the Cerro Blanco Property… a sprawling 17,041-hectare rutile deposit in Santiago, Chile owned by the company, (which) is expected to produce 112 million tonnes of rutile.”
Another reason why the price of Titanium Dioxide is expected to fall in the coming months is the decrease in paint production in China. As China’s National Bureau of Statistics states, “China’s output of coatings in April was down 5% year on year, mainly due to the slowdown in the real estate market – the total area of new housing projects under construction during January-April 2015 was down 17% on last year.”
Furthermore, sluggish demand from plastics producers, caused by low oil prices, is also making speculators foresee a TiO2 price drop. As CCM makes clear, “The plastics market is strongly influenced by oil prices, so if there is a sudden rise in global oil prices (this) will breathe new life into the market (for TiO2). However, at the moment the plastics market is not looking like a likely source of strong demand for TiO2.”
In the strange world of Titanium Dioxide, it is both its versatility and its widespread production that causes price fluctuations. Being so widely used, means that a fall or rise in the demand for paint, plastics, cars, houses, paper, sunscreen or solar panels, will all have an affect on price. Given that this is the case, it is possible that over-analysis of data from too many sources can result in inaccurate predictions.
At present, many analysts expect prices to start a downward trend, but it is a keen trader who would bet the farm on that! Instead, buyers and sellers must be open-minded when it comes to future prices and possibly accept fluctuations as part of the weird world that is Titanium Dioxide.