COVID-19 creates another obstacle for the TiO2 industry
TiO2 is a cyclical business that generally tracks GDP, albeit there is “a lot of noise” in the short term. In the past 18 months, there has been some overcapacity, leading to a drop in prices, in addition to an overabundance of materials. Although there were some signs of recovery in demand at the beginning of the year, “that’s probably been delayed or put off, at this point, due to the COVID situation.”
The specialist outlined the end-markets across industries, as well as the potential positive developments that could cause an uptick for demand. For instance, the US enacting economic stimulation packages could lead to construction activity. In addition, any stimulus encouraging the move towards more efficient cars could be a boon for the TiO2 industry, as the new vehicles would need paint.
An overview of the supply chain was given, as well as an illustration of Chemours’ advantages. It is a “challenging supply chain because of the quantity of raw materials that has to be moved around.” Moreover, notice has to be given to the mines up to a year before the materials are needed.
What sets Chemours apart is its ability to use lower-grade ores and its scale. “They run a process with… the biggest scale in the world, so the biggest chlorinators, the biggest reactors, but they can turn it down very easily and use lower-grade ores, because of process know-how and materials and construction.”
The specialist also discussed the competitive landscape, including Tronox and Ineos, as well as Lomon Billions’ recent move into the industry and what it could mean for Chemours
To access all the human insights from Third Bridge Forum’s Chemours & Coronavirus Impact Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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