Lacklustre Demand Constrains the Market Growth of Titanium Dioxide in Late May 2023

USA: The stresses in the U.S. and Swiss banking sectors have continued to impact the market expansion of key input materials required in the construction sector. The higher lending rates have exacerbated the demand concerns for Titanium Dioxide and its derivatives. As per the observed market scenario, the market players were cautious about incorporating any major development in the price value chain of Titanium Dioxide, and as a result, the prices have remained on the lower end in the last month.

Following the pandemic, manufacturers have raised their quotations amid high manufacturing costs of Titanium Dioxide across the world. However, with rising inflation, the purchasing power of the consumers has been deterred, and they were less willing to pay the high prices for Titanium Dioxide. Since March of 2022, the U.S. To counteract inflation, the Federal Reserve has aggressively raised interest rates. This has resulted in higher borrowing costs for individuals and companies as well as a decrease in vast expenditures and investments. On the input energy front, the prices of Henry Hub Natura Gas fell last week. With the rising production of natural gas in the Permian region, midstream pipeline companies are actively expanding their infrastructure to facilitate the transportation of gas out of the area. By the conclusion of 2024, there will be a substantial increase of 4.2 billion cubic feet per day (Bcf/d) in pipeline capacity, enabling a greater amount of gas production to reach consumer markets and Liquefied Natural Gas (LNG) terminals situated along the U.S. Gulf Coast.

Meanwhile, reduced TTF gas prices have led to a cooling of inflation in the European market. Elevated interest rates addressing economic challenges have slowed the growth of Titanium Dioxide. Limited procurement from downstream industries, such as paints and coatings, has also contributed to lower offers for Titanium Dioxide. Tighter financing conditions implemented to combat high inflation have prompted a reassessment of the economic outlook and a reversal in the pricing trends of various Titanium Dioxide derivatives, including Titanium Tetrachloride.

According to the pricing intelligence of ChemAnalyst, the prices of Titanium Dioxide and its derivatives, such as Titanium Tetrachloride, is likely to witness a downtrend toward the end of the second quarter of 2023. The construction industry is encountering difficulties, and industry experts do not anticipate a swift recovery soon. In addition, despite a dropping inflationary pressure, the Federal Reserve is likely to increase the interest rate to bring inflation to its targeted level.