LONDON (ICIS)–European TiO2 second-quarter (Q2) contract price talks are set to weigh up the expected seasonal pick-up in activity and Chinese exporters’ price rise initiative against current ample European supply and a cautious economic climate.
Contract price discussions are not expected to get underway in earnest until mid-March, according to some buyers, who added they are in no hurry to take position, amid the well-supplied market. Initial indications suggest that TiO2 Q2 contracts are likely to stabilise, after three consecutive quarters of price drops.
The anticipated stability for the second quarter is based on the expectation of a seasonal uplift in demand from the paints and plastics sectors during the spring and current ample availability to accommodate this. The continuation of general downward price pressure in Europe into the second quarter is unlikely given high seasonal expectations and a firmer export price sentiment from China.
However, this also very much depends on what extent high season demand materializes in Europe and on import prices from China. Whether Chinese import competition eases, this may lead to an at least stable, if not a firmer, price sentiment in Europe in the second quarter, particularly for low-end business.
The Chinese import competition for sulphate-based TiO2 typically affects mainly low-end business in Europe.
However, healthy stock levels in the TiO2 industry as well as slower economic growth in Europe may temper any possible upward pressure. Views on demand remain somewhat varied, depending on source and end-sector.
Activity from the downstream paints sector is largely in line with expectations for the time of year, with little signs of any seasonal pick-up yet.
There is some expectation that the seasonal uptick may occur in March or April, weather permitting.
One trader, however, said it has already seen some early signs of a demand increase from the paints and coatings sector. It attributed this to buyers needing to build stocks and prepare for approaching high season, especially in view of the early spring like weather in many parts of Europe over the past week.
In the downstream paper laminate sector, demand is solid to lower than expected year on year, with the latter seen to be due to a fragile economic climate.
The European TiO2 market is largely well supplied to such as extent that some buyers said they are being approached to take more volumes.
European TiO2 contract prices in the first quarter were assessed at…SOTORY CONTINUES ON ICIS ON link below