Tightening supply of TiO 2 foreseen

For the most part, the minerals to produce titanium dioxide pigment are found in areas of the world remote from the pigment-consuming markets and the major pigment producers.

A growing market for TiO2 is foreseen by Fallon Research Associates of New Jersey, which projects that by the year 2000, the world titanium dioxide business should be around the $20 billion(US) level.

In a recent report, “Titanium dioxide and titanium raw materials, 1987/88 to 2000, supply, demand, economics,” Fallon draws three conclusions:

* the tightness of supply to demand will persist through the 1990s to the year 2000 with some slow periods of respite;

* prices will accelerate faster than ever before in the history of the industry to justify new capacity additions — by 2000 the price will be $2 per lb;

* there will be more value added to raw materials in the source nations, especially Australia, China and the Soviet Union.

World supply of TiO2 in 1988, at 2.9 million tonnes, was in balance with demand, but Fallon foresees demand growing at a faster rate than supply beginning in 1993. Even with certain additions to capacity during the next few years, the shortfall in 1993 is expected to total about 100,000 tonnes.

New plants in the coming decade will require higher customer prices; Fallon predicts the price tag for new plants in the 1995-2000 period will approach $2 per lb. TiO2 was recently selling in the 96 cents range.

More than 80% of the titanium raw materials to produce TiO2 come from Australia and South Asia. SCM Corp.’s new chloride plant in Australia and TiO2 Corp.’s joint venture with Kerr-McGee Chemical to produce mineral, synthetic rutile and pigment are signs of a new drive to add value at home, Fallon says. Other indications are a Tioxide sulphate plant and a Hitox synthetic rutile plant in Malaysia.

Fallon calculates $6 billion worth of TiO2 is currently being consumed annually. The company sees that amount rising to $9 billion by 1993. By the year 2000, with a price of $2 per lb, the company sees the world market approaching $20 billion (with the non-communist would consuming $15.8 billion of that total).

Reduced supplies of gold from the communist-bloc countries and from scrap nearly offset an increase in non-communist world gold production from 1,298 tons in 1987 to 1,415 tons in 1988, the Gold Institute of Washington, D.C., reports. As a result, total supplies rose slightly from 2,008 tons in 1987 to 2,100 tons last year.

On the demand side, industrial demand remained at the 1987 level of 1,589 tons, while investor demand ran well above the 436 tons of 1987.

Pittsburgh-based Calgon Carbon reports it has increased its price of coconut base activated carbon products used in gold recovery operations by 10%. The price increase is the first by the company to the gold recovery industry in several years.

Calgon says the cost of coconut char used to produce the activated carbon has risen significantly in recent months because of inclement weather in coconut growing areas.

Non-communist world uranium production increased slightly to 94.9 million lb U3O8 from 94.4 million lb the previous year, The Uranium Exchange Company of New York reports.

“New production coming on line in Australia and the U.S. offset the reductions reported by some Canadian and U.S. producers and by several South African companies who tapered output and closed four mines,” says a recent Ux Report.

While spot market prices fell by 30% last year — they are currently under $12(US) per lb — the over-all effect on production was minimal because a large portion of the mineral is sold under long-term contracts.

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