Limited Upstream Supply Fuels Bullish Market Sentiments for Titanium Tetrachloride in Q1 2024

Marseille (France): The European construction sector has been facing significant challenges for the past few months. With the start of the year 2024, the downturn in the construction sector has prevailed, weakening market sentiments of upstream raw materials, including Titanium Tetrachloride. However, the low operating rates of manufacturing firms have been fueling Titanium Tetrachloride supply-side concerns, prompting manufacturers to hike their prices to boost profitability. Furthermore, shipping disruptions in the Red Sea, along with existing supply delays due to restricted traffic in the Panama Canal and adverse weather conditions in the US, have exacerbated the situation, leading to increased shipping costs and subsequent price hikes.

The ChemAnalyst database has shown that the prices of Titanium Tetrachloride have demonstrated an increment of approximately USD 110 per ton in the domestic market of France. Lower operating rates of manufacturing firms during the holiday season and in previous quarters have started to pressure supply. The unexpected decline in production has continued into February, causing a decrease in both production and stocks for this month. Additionally, higher Titanium Ore prices have further supported the upshift observed in the price realizations of Titanium Tetrachloride. Furthermore, market players report that new inquiries from the downstream construction sector have been average. France's construction sector worsened at the start of 2024, with the sharpest contraction in total activity in three years. Work on all building projects decreased, especially in housing and commercial construction. In January, France's Construction PMI dropped further into contraction, declining from 42.6 in December to 39.6. This marked the lowest reading in three years, signaling a sharp and accelerated decrease in overall activity levels in the country's construction sector.

On the other hand, amid the Spring festival holidays, the majority of manufacturing firms have undergone shutdown or suspended operations, limiting the procurement volumes of Titanium Tetrachloride. However, in January 2024, the price of Titanium Tetrachloride remained high, stemming from reduced production rates and maintenance shutdowns. This has limited supplies to cater to the demand from the downstream construction and automobile industries. Manufacturers have responded by raising their prices. However, the off-season winter demand has put pressure on the market dynamics of Titanium Tetrachloride.

According to the pricing intelligence of ChemAnalyst, the prices of Titanium Tetrachloride might progress in the northwards direction in the Asian market. The low availability of Titanium Ore is also expected to keep market sentiments bullish. Furthermore, in the European market, lower operating rates of manufacturing firms might exert supply-side concerns for Titanium Tetrachloride manufacturing firms, keeping prices higher in the near term.