The rise in demand from the downstream paints and coatings sector has impacted the market fundamentals of Titanium Dioxide in the first month of January 2023. The Chinese Spring Festival has halted production activities across the nation, and logistics have yet to retrieve entirely in some areas amid a shortage of workers after the rollback of COVID containment measures. Furthermore, inflation and production activities have been improving across the European region, strengthening the pricing dynamics of Titanium Dioxide.

On the demand side, there has been active procurement from the paints and coatings sector, and the market growth of upstream Titanium Dioxide in the Indian market has been resilient. The data shows that around 70% of India's domestic Titanium Dioxide requirements are fulfilled through imports. To overcome its dependence on other countries, one of the Indian market players, Meghmani Organics (MOL), has emphasized doubling its Titanium Dioxide (TIO2) capacity to 33,000 tonnes/year by December 2023 at the cost of around $45.98m. In addition, the mining giant Rio Tinto reported that Titanium Dioxide slag production was 18% higher on a y-o-y basis in 2022 in Pilbara, Australia.

However, overall shipments, including specialty chemicals, to China, South Korea's largest trading partner, declined by 31.4% year over year in January in South Korea, while those to the US fell by 6.1%. The export decline has been attributed to an array of negative factors, such as high inflation, rising interest rates, and volatile energy prices, culminating in the global economic slowdown.

According to ChemAnalyst, the price trend of Titanium Dioxide is anticipated to accelerate, driven by a rise in offtakes from the downstream paints and coatings sector across the globe. The reopening of the Chinese economy will drive trade activities in the domestic and overseas markets and will likely operate the specialty chemicals market at a high level in the forthcoming weeks. However, the market players are cautious, as an escalation of the war in Ukraine could be a major menace and undermine the energy and chemical markets.