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09 2020
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Iluka Titanium feedstock views

Oct.19 2020      Source:Iluka

Keywords:titanium feedstock

Titanium Dioxide Feedstock Markets High grade titanium dioxide feedstock (rutile and synthetic rutile) sales for the quarter were 46 thousand tonnes, with rutile sales of 34 thousand tonnes, up 23% from the June quarter, while synthetic rutile sales of 12 thousand tonnes, down 68% from June quarter due in large part to the previously disclosed contract dispute with Chemours. 

Assuming Chemours takes no further synthetic rutile volumes for 2020, Iluka expects 99 thousand tonnes to be sold under take-or-pay contracts this year, of which 87 thousand tonnes have been sold year-to-date. In addition to these tonnes, in 2020 year to date, Iluka’s has sold 14 thousand tonnes of synthetic rutile as spot sales.

Pigment demand improved during the third quarter, following the easing of government imposed lockdowns along with better than expected DIY and professional paint activity as consumers remained focused on renovating and remodelling homes. Pigment operating rates, however, have remained below normal as pigment producers work down inventory that was built up during the second quarter when demand contracted materially. In addition, hurricane activity in the Gulf of Mexico has resulted in a prolonged idling of the Lake Charles pigment facility, which represents approximately 10% of US supply. 

The one-month outage at this facility has further helped pull down inventory levels across the North American market. Demand in China has now returned to pre-COVID-19 levels with steady increases in domestic demand as well as resumption of exports to key markets in Europe, South East Asia and South America. Pigment operating rates are expected to gradually increase through the fourth quarter and beyond heading into the northern hemisphere spring peak demand season. Welding demand has been quite resilient through the global pandemic.

 Conversely, the titanium sponge market has been severely impacted due to the significant downturn in global aircraft orders and production. 5 Weighted average rutile prices in Q3 were US$1,195 per tonne. Provisional prices are invoiced during the period and the majority of contracts have pricing mechanisms that follow fluctuations in a basket of high grade ore transactions and are subject to six-monthly adjustments which occur after the reporting period. The final prices realised in H1 are in line with the provisional prices in Q3.

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