The Indian paint companies are finding themselves with no other option but to pass on the burden of increased raw material rates to its customers. As a combined effect of reduced inventories and steady economic recovery from the pandemic-induced slump, the domestic paint manufacturers are anticipating strong inflation in the paint & enamel rates across India.

This has been strongly attributed to skyrocketing price of the key constituent, Titanium Dioxide (TiO2) which gained almost by around 25% during the quarter ending December. Talking about the year-on-year price movement, it is being assessed that Titanium Dioxide prices are running somewhat flat, but sources reveal that prices are expected to reach greater heights moving into January and February.

Crude derivatives constitute nearly 60% of the total cost of goods shipped to paint companies and TiO2 pigment is about one-fourth of the composition of paint. More than 70% of India’s Titanium Dioxide demand is met through imports with China as its leading exporter. Since imports hold a majority share in the country’s pigment demand, rupee depreciation is another key factor affecting the buyer’s margins.

“Preferring to actively stock the raw material, local dealers are expected to maintain a cautious approach before another round of price hike”, stated a Mumbai-based TiO2 trader.

As per ChemAnalyst,” Leading paint industries across India are reporting strong quarterly numbers influenced by pent-up end-use demand and greater consumer spending over aesthetics across the urban markets. However, soaring raw material is likely to weigh heavily on the player’s operating margins.

Registering strong monthly gains, domestic offers for Titanium Dioxide were heard around USD 2560 per MT for Anatase grade while Rutile grade stood at USD 3040 per tonne during the week ending December 25th. December negotiations for Titanium Dioxide in China were heard around USD 2500 per MT, showing a sharp spike from USD 2160 per MT levels observed in September”