LONDON (ICIS)–Europe titanium dioxide (TiO2) demand has seen some segment and geographical wins and losses during the lockdown – but headwinds loom amid the ongoing coronavirus pandemic and economic slowdown.
Do-it-yourself (DIY) activity has risen and is higher than normal in some cases following widespread stay-at-home measures implemented across Europe since March.
Demand in northern Europe has been more resilient and buoyant compared to southern Europe and France – as the latter have been more adversely affected by the virus.
Favourable weather conditions over the Easter weekend saw improved outdoor decor paints activity in certain regions such as Scandinavia, where lockdown measures are less strict.
While DIY demand may be diluted in some cases by non-essential retail outlet closures, paint shops in other countries remain open and online purchases are also possible.
In contrast, professional paints activity has been dampened by illness, lockdowns and cost-saving measures.
According to a few buyers in the paints sectors, higher-than-expected DIY activity is offsetting lower demand from the professional painting sector.
Although printing inks and plastics demand into the food packaging sector has increased following containment measures and food stockpiling, demand for other applications has been adversely affected by downstream closures.
Certain printing inks applications such as in advertising/print media have been dampened by the virus and weaker economic outlook.
Construction activity is holding up in some countries, while others have been more severely affected because of more stringent lockdowns.
Industrial and auto demand has been hit by a series of automotive output closures, supply-chain disruptions and lockdowns.
Uncertainty about how long the coronavirus pandemic will last is likely to lead to cautious buying sentiment, particularly as the virus has weakened the global economy.
TiO2 demand is linked to economic performance and the increasingly fragile climate suggests that some challenges lie ahead over the coming months, if not longer.
BEST CASE: DOUBLE-DIGIT FALLS
While forecasts are increasingly difficult during these unprecedented times, demand estimates from the key paints sector suggest moderate double-digit percentage drops in the second quarter and possibly the third – and these are best-case scenarios.
While European auto production restarts are expected over the coming weeks, demand for certain consumer products is likely to be hampered by heightened economic concerns.
TiO2 paper laminate demand into furniture and flooring is also expected to be affected by reduced consumer confidence and spending.
Professional painting activity is also likely to be lower because of cost-saving measures.
DIY demand, on the other hand, may weather the storm as people make the most of their existing property assets.
Europe TiO2 contract price settlements for the second quarter have seen relative stability so far, as higher costs and reduced Q1 inventories are weighed against a mixed demand picture, depending on end-sector and a fairly balanced market.
Europe TiO2 Q1 contract prices are at €2.40-2.70/kg (kilogram) FD (free delivered) NWE (northwest Europe).
TiO2 is used as a white powder pigment in products such as paints, coatings, plastics, paper, inks, fibres, food and cosmetics.