Despite Fragile Demand, German Titanium Dioxide Prices Might Escalate in Early Q4 2023

Hamburg, Germany: The price of Titanium Dioxide has been continuously falling in the domestic market of Germany for the past two quarters. This trend persisted in September due to a lackluster construction sector. The decline in purchasing sentiments of the downstream Construction and Automotive sector has significantly impacted the market performance of Titanium Dioxide. As per the observed market scenario, Germany's economy is slowing down because key growth drivers are losing steam. Various immediate and lasting factors, such as geopolitical issues, substantial public debt, and a sluggish manufacturing industry, negatively impact the economy, prompting downward pressure on the pricing dynamics of several specialty Chemicals, including Titanium Dioxide.

The ChemAnalyst database has shown that the price of Titanium Dioxide has plummeted by USD 40 per ton on a FOB basis. The flow of inquiries from the downstream Paints and Coatings sector didn't rise, and as a result, the Titanium Dioxide market has operated at low levels. The German industrial sector, which heavily depended on affordable Russian oil and gas, suffered significant repercussions. Foreseeing the decline in procurement from the downstream market, one of the leading manufacturers of Titanium Dioxide, Chemours Titanium Technologies, has decided to shut down a plant in Taiwan. The addition of new production capacity in China and a deceleration in the Chinese economy are expected to worsen the situation. Among multinational companies, Venator has faced the most severe consequences and has initiated voluntary bankruptcy proceedings as a step toward financial restructuring. It is likely that Venator's 50,000 tons per annum (t.p.a.) plant in Duisburg, Germany, and its 80,000 t.p.a. plant in Scarlino, Italy, may face closure.

Furthermore, according to the data from Germany's Federal Statistics Office, Destatis, in September, consumer prices experienced a 0.3% increase, primarily attributed to a slowdown in the rise of energy prices. In addition, in September, inflation in Germany dropped to 4.5%, a decrease from the 6.1% recorded in August. Notably, the inflation rate stood at 4.3% in February before the global surge in energy and food prices, triggered by the Russian attack, impacted economies worldwide. Despite this, the European Central Bank's commitment to achieving its inflation goal will maintain stringent monetary conditions, pressuring the market fundamentals of Titanium Dioxide among the manufacturers.

According to the Pricing Intelligence of ChemAnalyst, the prices of Titanium Dioxide might gain momentum in the European market. The reduction in production during the holiday season in the middle of the third quarter has harmed manufacturing activities in the region. This has resulted in a relatively limited supply of finished goods to fulfill the demand from end-use industries, leading to a rise in the offers of Titanium Dioxide.