Iluka Titanium feedstock views
Jan.29 2021 Source:Iluka
Keywords:titanium feedstock
Sales of high grade titanium dioxide feedstock (rutile and synthetic rutile) for the quarter were 69 thousand tonnes, up 50% from Q3 but well down on Q4 2019. Rutile sales in Q4 2020 were 54 thousand tonnes, up 58% from Q3. Synthetic rutile sales of 15 thousand tonnes were in line with Q3, reflecting the contractual dispute with Chemours. While litigation in respect of the contractual dispute remains ongoing, Chemours has scheduled a vessel to take its first shipment of synthetic rutile for 2021 (4 thousand tonnes in late January), in line with the contract.
Despite the continuing impact of COVID-19 restrictions in many markets, pigment demand remained strong during Q4. Iluka understands that paint plant shutdowns that typically occur over year-end were cancelled in order to keep up with demand, with one large paint producer looking to increase production by 10% during the first half of 2021. Iluka’s current level of enquiry for high-grade feedstocks is encouraging.
Pigment producers have responded to the positive market conditions by announcing a series of price increases for Q1 2021. Most industry observers believe the increases will be implemented. Lead times for certain pigment grades now exceed 30 days; and recent shipping and logistics issues have exacerbated the supply tightness. COVID-19 has caused shipping containers to be in short supply at key ports in China, with associated delays in exports and increased freight rates. These logistics issues are helping to improve market conditions in European and South East Asian markets that have previously relied on Chinese exports. Demand from the welding sector was strong, with quarterly sales to this relatively small market segment the highest on record.
Titanium sponge demand in China has improved and Iluka was able to secure sales of rutile during the quarter to two new sponge producers. Weighted average rutile prices in December quarter were US$1,199 per tonne, in line with third quarter pricing. The 2020 weighted average price achieved was $1,220 per tonne, up 7% from 2019.
