Metal oxide prices rise on feedstock costs

Speciality chemical companies are increasing their prices for fumed metal oxides and fumed silica in response to rising feedstock and transport costs, as downstream demand grows.

Germany-based Evonik is increasing its sales prices by 35pc on average for all its fumed silica and fumed metal oxide products globally with immediate effect, the company said today. Evonik produces silica, titanium and aluminium oxides for a range of chemical applications. The company raised prices for its silicone-based products by 30pc earlier this month.

Evonik expanded its specialty silica production in Japan in October. Its DSL Japan joint venture with Japanese pharmaceutical company Shionogi opened a new production line to increase the capacity of its plant in Ako by 30pc to meet demand from industries from automotive to agriculture. Evonik also opened its first fumed silica production facility in China in October, targeting rising demand for silicones, coatings, adhesives, sealants and other industrial applications. The joint venture with Chinese chemical company Wynca brings together Evonik's product technology with Wynca's silicone industry chain to create a circular production loop.

US chemical firm Cabot reported a $20mn increase in earnings before interest and tax in its performance chemicals business in its fiscal fourth quarter, partly on higher prices for its fumed silica products, particularly in China. Cabot increased its fumed silica prices from 15 September by up to 10pc depending on the product grade, citing higher raw material, transportation and operational costs across regions.

Freight rates have soared in the past year owing to lockdown restrictions, and although prices have declined in the last week, supply chain bottlenecks are expected to keep shipping costs elevated in the near term.

Prices have also climbed throughout the silicon and aluminium supply chains in recent months, as power supply restrictions imposed in China in September-December disrupted production. Chinese 4-4-1 chemical-grade silicon prices tripled from August to September, reaching their highest in more than 15 years. And while the market has retreated from the highs, prices have risen again this week.

Prices are expected to continue rising as silicon metal production in Yunnan and Sichuan provinces could decline further, with the end of the monsoon season reducing hydropower production and further exacerbating power supply constraints. Silicon production typically falls during the dry season in November-May.

Producers of titanium oxides are also reporting strong demand from the chemical industry for paints, coatings, pigments and plastics, particularly from China.

In the US, titanium dioxide producer Chemours reported a 14pc year-on-year and 6pc quarter-on-quarter increase in its segment price for titanium products in its third-quarter results, which offset higher costs for plant operations to support demand growth, higher ore and energy prices, and incremental expenses associated with supply chain disruptions.

Titanium concentrate prices in China have climbed to their highest in at least nine years, and supply of downstream products has tightened with recovering demand outpacing production.

By Nicole Willing