The TiO2 industry continues to experience difficult times. Multi-national producer (MNP) volume in 1Q23 was 31% lower than 1Q22, while net exports from China increased 22%. This followed a fourth quarter that was down 35% compared to the previous year. Raw material inflation remains in place. Venator, the world’s number five producer in 2022, filed for Chapter 11 bankruptcy protection in May. The spring coatings season for 2023 was extremely weak. Expectations for a second-half recovery in 2023 are not promising. Is there a light at the end of the tunnel, and if so, how long is the tunnel?
To understand the nature of the recovery, it is best to review the nature of the downturn. The United States housing market has always been a key component of TiO2 demand. In the case of MNPs, their dependency on the North American market continues to grow. TiPMC’s analysis indicates that the four major global TiO2 producers are becoming increasingly dependent on the North American market. This market presents unique barriers to developing producers such as the Chinese producers. Chloride TiO2 is generally specified for most applications in North America. Most coatings applications, particularly architectural coatings, require TiO2 to be delivered in the form of a slurry, as many consumers converted their operations to allow the TiO2 producer to create and sell slurry product, vs. mixing dry product themselves. Third, the recent tariffs imposed by the United States on TiO2 products from China have increased protection for domestic producers.