INTERVIEW: Chemours well supplied on TiO2 feedstocks despite disruptions

NEW YORK (ICIS)–US-based titanium dioxide (TiO2) producer Chemours is well supplied on the raw materials front, despite industry supply chain disruptions, its incoming CEO said on Tuesday.

“The good news about this year is that demand is strong. No matter where you look around the world, by product line, it’s very a consistent theme, and certainly applies in spades to our TiO2 business,” said Mark Newman, incoming president and CEO of Chemours.

Newman will succeed Mark Vergnano, who has been CEO since Chemours’ founding in 2015 and will become non-executive chairman for the rest of 2021.

“The other truth is that supply chains are extremely tight, whether it’s semiconductors to the auto industry [or] chlorine or chlor-organics,” said Newman.

“We are well supplied on ore. We’ve had a history of having very diversified sources on ore, including our own Florida/Georgia mining complex. We’re monitoring the ore situation [but] as it relates to our outlook for this year, we continue to believe we are well supplied,” he added.

The burning of heavy equipment at Richards Bay Minerals’ (RBM) site in KwaZulu-Natal on 3 June is causing concerns about TiO2 ore supply, with one analyst noting the tight TiO2 feedstock market may become even tighter.

RBM, majority owned by mining giant Rio Tinto, produces predominantly ilmenite, rutile and zircon. Ilmenite and rutile ores are key feedstocks in TiO2 production.

Meanwhile, Chemours continues to invest in its own ore operations in Florida and Georgia, in the US.

The company has operated a titanium mine in Starke, Florida since 1949, and in 2019 acquired Southern Ionics Minerals, which added a titanium mine in Nahunta, Georgia, and an associated minerals sands separation facility in Offerman, Georgia.

“That was a good acquisition then, and in retrospect today, a great acquisition. And then we’ve been investing behind that acquisition on developing various ore bodies around both our Offerman complex and our Starke complex,” said Newman.

“We continue to invest to extract those minerals and leverage the facilities we have with the acquisition of Southern Ionics,” he added.

The mines provide low-cost ilmenite ore feedstock and currently supply less than 10% of Chemours’ ore feedstock requirements.

MANAGING TIGHT CHLORINE
On the chlorine feedstock side, Westlake Chemical on 3 June declared force majeure on chlorine from its Natrium, West Virginia, complex after an unspecified technical issue, adding to the structurally tight chlorine supply in the US. The complex has 365,000 tonnes/year of chlorine capacity.

“We continue to manage through a lot of issues on the supply chain, especially chlorine. We have multiyear contracts with all the large North American chlorine suppliers both in the US and Mexico. We’re leveraging those contractual and deep strategic relationships to ensure we keep all our plants running and meet demand,” said Newman.

Amid supply chain disruptions and strong demand, Chemours may see a delay in optimising its production processes to lower costs.

“If there’s any downside, [it’s] how quickly we optimise our production to get to a more optimal cost position. This a good problem to have in the [context] of high demand and a great environment from a pricing perspective but surely it’s creating some issues in terms of optimising our circuit,” said Newman.

On TiO2 supply, Chemours is giving priority to our AVA (Assured Value Agreement) customers amid a strong coatings season, he noted.

“Coatings season is going well. We continue to see strong DIY (do-it-yourself) and contractor volumes. In fact, as we talk to some of our coatings customers, their inventory levels through to retail are… below what they would like them to be,” said Newman.

“We see strong demand going into the second half of the year. We’ll [likely] see further growth going into 2022 although it’s a bit too early to call it just yet,” he added.

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