The past two years have seen the titanium minerals and titanium oxide pigment industries affected by significant consolidation among producers and end-users.
A rash of acquisitions in the paint industry, a major end-user of titanium oxide pigment, resulted in fewer large global producers, which, in turn, has contributed to lower prices, according to a report by minerals analysts Roskill Information Services.
Titanium oxide pigment accounts for 93% of total global demand for titanium minerals. The remaining 7% is used in the manufacture of titanium metals. Consequently, titanium oxide drives the US$7-billion titanium industry.
By the beginning of 1998, all levels of the industry were operating at near peak capacity, but feedstock was limited. This situation changed as a result of the Asian financial crisis, which prompted a downturn in construction and decreased demand for the metal in the commercial aerospace industry. By the end of 1998, producers were scaling back output.
The prospects for economic growth in the Asia-Pacific region remain uncertain, and growth rates for titanium oxide may be lower than historical increases of 3% per year, probably about 2.5%. Future growth will likely be decided by global economic growth rates.
Despite the short-term outlook for a supply surplus, depletion of known titanium resources and strengthening titanium oxide pigment demand will result in supply shortages, possibly as early as 2005.
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