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US DuPont proposes 15 cent/lb TiO2 hike

October 17/2011

(ICIS) -- DuPont Titanium Technologies announced on Friday its plan to increase North American pigment prices by 15 cents/lb ($331/tonne, ?238/tonne) effective on 1 November, making it the second domestic producer to propose an increase. Current North American TiO2 prices are $1.80-1.94/lb, as assessed by ICIS. Buyers said they were frustrated but not surprised.

I am hearing a possibility of another 30% in price increases next year, a coatings maker said. But he and other buyers said they would resist the increase as strongly as possible.

Kronos announced in September its intent to implement a 25 cent/lb increase effective on 1 October, but buyers likewise vowed to fight the effort.

White business is still soft, a compounder said, and TiO2 sales are just as soft. Customers are hoarding TiO2, awaiting another shortage in the marketplace. But you can only sit on so much inventory before you run into cash-flow problems.

Producers did back off of recent initiatives for October implementation by 10 cents/lb, generally conceding softer market conditions, but a producer said that it would continue to negotiate to achieve that remaining portion in the near term.

If the newest initiatives succeed, the Kronos hike would take place on 1 January, in accordance with the market's typical 90-day lag. Likewise, DuPont's increase would take place on 1 February. For all the supply-side rationale, the ongoing increases will have a chilling effect on the marketplace, a buyer said.

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