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US ethane and titanium dioxide prices to remain relatively high in 2012

December 20/2011

(ICIS) -- Prices should remain relatively high for US ethane and titanium dioxide (TiO2) in 2012, an analyst said on Monday. A majority of US crackers use ethane as a feedstock to produce ethylene, which is one of the reasons why supplies are tight, according to a research note by David Begleiter, an analyst for Deutsche Bank. He estimates that more than 80% of North American ethylene production relied on natural gas liquids as a feedstock in 2011.

In addition to demand, constrained pipelines are also keeping ethane prices high, Begleiter said. New pipeline and fractionation capacity will not be in place until late 2012 or early 2013.

As such, Begleiter expects ethane supplies to be balanced to tight when compared with demand. Ethane supplies could loosen somewhat in the second quarter, when about 11% of North American ethylene capacity will be off line, Begleiter said. Regardless of the expected tightness, ethane crackers should maintain their advantage against naphtha crackers, he said.

Titanium ore is a feedstock for the pigment titanium dioxide (TiO2), and high ore prices helped support higher prices for the pigment.

TiO2 producers should be able to pass through the cost hikes because supply for the pigment remains tight.

Author:Marina Ivanova
Category:General News
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