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Jan 06, 2024

Rebound in China, Europe to lead TiO2 recovery in '23

Al Greenwood 14-Feb-2023 HOUSTON (ICIS)–Rebounds in China and Europe should lead the recovery in demand for titanium dioxide (TiO2) in 2023, an executive with US-based Chemours said on Monday.

Al Greenwood

14-Feb-2023

HOUSTON (ICIS)–Rebounds in China and Europe should lead the recovery in demand for titanium dioxide (TiO2) in 2023, an executive with US-based Chemours said on Monday.

Customers of the pigment destocked during the last months of 2022, with a lot of that activity taking place in China and Europe.

Chemours expects TiO2 destocking to continue through the first quarter. Demand should then recover through the rest of the year.

Despite the expected increase through the year, Chemours does expect overall TiO2 volumes to decline for 2023.

EUROPEAN AND ASIAN OUTLOOKSSentiment in Europe has become more optimistic versus four months ago, when the region was concerned about high energy prices, said Ed Sparks, president of Chemours’s Titanium Technologies segment. He made his comments in an interview with ICIS.

“What is going to drive improvement in 2023 is going to be the normalisation of the demand picture in Europe,” he said. “When that normalises and improves off of really low levels, that will be a driver for us.”

In Asia, China’s reopening should be a tailwind not just TiO2, but for the national and regional economy in general, he said.

“I’m very optimistic about China’s economic recovery,” he said. It is early, but Chemours is seeing signs of a rebound, especially through its distributor partners.

China’s Lunar New Year makes it difficult to forecast trends early in the year. The holiday ended earlier in February, and it typically takes several weeks for demand trends to return to normal.

In China, Chemours’s TiO2 is also used heavily in industrial coatings and paper laminates as well as in architectural coatings, Sparks said.

Industrial coatings have a longer value chain, so recovery in that end market should manifest itself later in the year, he said.

NORTH AMERICAFor TiO2, demand in North America held up better than in other parts of the world, Sparks said. “It was nothing like what we saw in Europe and China, where there was a significant drop.”

Demand for pigment from professional paints remained resilient, while that do-it-yourself (DIY) customers had dropped off some, he said. Demand did slow in the plastics market.

Mortgage rates on 30-year home loans have declined from November, when they exceeded 7%, according to Freddie Mac, a US company that purchases and securitises home loans. Rising mortgage rates had contributed to a decline in existing home sales, to which 80% of architectural-coating sales are tied.

The rate seems to be levelling off at above 6%. It is unclear if the decline will translate into higher demand for TiO2.

The TiO2 market is being stablised by the low supply of housing that is for sale on the US market, Sparks said.

The US had a 2.9 months’ supply of existing houses in December, according to the National Association of Realtors.

A market is in equilibrium when it has a six-month supply.

Interview article by Al Greenwood

Thumbnail shows white paint. Image by Shutterstock.

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