US-based titanium dioxide (TiO2) and zircon producer Tronox expects supplies to tighten this year as Chinese sellers pull back from Europe, India and Brazil in response to anti-dumping duties and plant shutdowns.
The company expects demand for its TiO2 products to rise throughout the year as preliminary anti-dumping duties on imports from China are finalised.
The EU introduced preliminary duties ranging from €0.25-0.74/kg in January. India is expected to make a final decision on duties in the third week of May and in June, while Brazil is expected to decide towards the end of June.
Tronox reported a sequential rise in demand for TiO2 above seasonable norms in the first quarter as duties in Europe began to take effect, with sales volumes recovering to levels not seen since the second quarter of 2021, chief executive officer John Romano said. Demand was also stronger in North America. Competition in Latin America, the Middle East and Asia-Pacific weighed on sales, but the company expects to see growth in the second half of the year.
Chinese suppliers previously exported around 270,000 t/yr into Europe and Tronox has seen its market share rise because those suppliers have reduced exports to the region, Romano said.
India represents a 450,000 t/yr market and Chinese market participants have been exporting more than 300,000 t/yr to the country. There is no significant domestic production in India and it is the second-largest market that Tronox sells into globally, as it has the advantage of a free-trade agreement for its supply out of Australia. "The potential lift from the Indian anti-dumping activities we would expect to be at or slightly above the magnitude of what we're seeing in Europe," Romano said.
Several TiO2 pigment plant shutdowns, including Tronox's 90,000 t/yr Botlek plant in the Netherlands that closed in March, will also contribute to reducing oversupply. Tronox does not expect to bring the plant back on line in the future, but Romano said neither does it intend to close anymore of its facilities. Once the market rebalances, the company anticipates running above its current capacity utilisation rate of 80pc. It had built up inventory prior to the Botlek closure and has repositioned this material to meet the needs of the European market from other plants.
Tronox reported lower prices during the first quarter but has begun to implement a TiO2 price increase in Europe for the second quarter. It expects its overall TiO2 prices to be flat to slightly higher this year, owing to lower prices in other regions.
Tronox's first-quarter revenue from TiO2 sales was $584mn, down by 3pc year on year and driven by a 1pc decline in volumes and a 1pc decrease in average selling prices (ASPs), including product mix.
The zircon market remains under pressure. Tronox's zircon revenue dropped by 22pc year on year to $69mn, driven by a 15pc decline in sales, compared with a strong first half last year and a 7pc decrease in ASP on a slower start to the year in China. The company expects growth of around 5pc in zircon sales this year overall on a potential uptick in the second quarter.
