The landscape of the TiO2 industry is changing rapidly and there is no guarantee that the market fundamentals of the last 20 years will return during the next five years. On the demand side, emerging economies are stretching the supply chain to the breaking point, forcing rapid price escalation for those customers able to source the material. On the supply side, the industry has been in a clear “retrenchment” over the past 20 years, with suppliers rationalizing high-cost capacity during industry downturns and only adding incremental capacity through brownfield additions, while attempting to grow with the market and maintain market share.
TZMI does not expect any significant capacity expansions outside of China over the next two years, but expects global demand to grow more than 4% over the same period. China producers will add significant capacity over the next decade, with this capacity to run at very low utilization rates. The ability of China’s producers to procure adequate feedstocks to support the additional capacity is in question.