Titanium pigment market: inventory status improved year by year Industry on the market next year2015.11.24 09:46
Recent international titanium white giant huntsman companies, such as the United States for company financial position and the restructuring plan announced in succession, shows that global titanium pigment market is not out of the cycle. Titanium dioxide prices continue to slump, starts still remain low, but also reveal some of the highlights in the dilemma-titanium dioxide stocks have fallen to normal levels. The industry is expected, the next few years demand growth will be more than new capacity, titanium pigment market recovery or not.
Giant profits is not optimistic
In the second quarter of 2015, huntsman, pigments and additives business department adjusted interest tax, depreciation and amortisation (Ebitda) fell 56% year on year, his company's titanium dioxide business profits fell 71% year-on-year, for company's titanium technology business profits fell 55% year on year.
Endeavoring to cut costs
Huntsman and longed for has already begun to implement cost reduction plan. Huntsman at the end of 2014 announced plans to cut 900 jobs in titanium dioxide pigments and additives business department, this is part of the restructuring plan, the company aims to save $175 million a year before mid 2016.
Longed for August announced restructuring plans, said at the end of September before closing located in Delaware Mr Moore a titanium white production device, and close new Johnson, tenn., a titanium pigment production line. The company said the restructuring plan would slash the titanium white production capacity of 150000 tons/year, save about $45 million a year.
"Hamilton of titanium white plant is located in the state of Mississippi have closed down for 1 production lines, at the same time also suspended in Australia quina that titanium white plant one of the four production lines, shut down production capacity about 15% of the total output of the company can.
Inventory status improved year by year
Since 2012, the global value chain has been profitable. Global titanium pigment market sales fell by 23% in 2012, the manufacturer's stock surged to 100 days of supply, prices also fell sharply from nearly a decade high. In this case, the producers have cut production, the world starts fell to about 70% of the average level.
Titanium pigment market over the past few years, the world has been slowly shift in the direction of the balance of supply and demand. In the second quarter data, for example, in 2013 for the quarter producer stocks fell to 60 days of supply, 58, 2014, 2015 fell to 46 days further. Huntsman company said global titanium white plant in 2014 the average capacity utilization has risen to 80%, is expected to more than 85% in 2017.
In the past two years, the world's major chain, has improved steadily, profit chain, sales also increased year by year. However poor earnings performance of titanium white giant in the first half of this year, people to the chain, but also to the profit ability to improve the sustainability of the doubt.
Industry on the market next year
Chairman and CEO Thomas k in the company's second-quarter results said on a conference call, titanium dioxide prices fell by 5% in the second quarter, the market supply continues to outpace demand, the current sales price has not been paid off. However, he still optimistic about the prospects for titanium pigment market. He said: in 2015, is the years of the transition of titanium dioxide business, in the second quarter we continue to face challenges, these challenges in the third quarter is expected to continue to exist. However, the industry's response to this dilemma speed is faster than in the past a lot of, to adapt to the weak demand dilemma caused by China's economy is cooling.
The current inventory of the global value chain is close to normal rapidly, and the customer's stock may have fallen to below the normal level, means that the inventory restocking moment will come soon. Inventory at or below the normal level, raw ore prices stabilise and titanium white spot prices rose, these three factors mean that titanium dioxide pricing level next year will be normal. Medium term, he notes, titanium white production can't have been in near the break-even point, especially for the integration of such low-cost producers. He expects huntsman, titanium dioxide business profitability will restore to about 12% of normal levels, "the profitability will be higher.