2005 Titanium Dioxide Industry Nearing Recovery Peak
The Titanium Dioxide (TiO2) industry is poised to return to re-investment level margins within the next two years, so long as demand growth continues to drive the industry's recovery, according to a Fitch Ratings report.
Fitch estimates that annual TiO2 demand needs to average at least 3% over the next decade to maintain operating rates in the mid-90s and above, while also assuming capacity growth of only 1% annually. Based on those assumptions, the next peak for the TiO2 industry is expected in late 2007 or early 2008. The profitability of the peak will depend on the rate of demand growth and amount of discipline shown by major producers to steadily increase capacity.
After TiO2 producers struggled with three years of weak business conditions, demand rebounded in 2004 with an estimated 7% growth in worldwide consumption. Strong global growth and improved economic conditions in the U.S. propelled TiO2 demand. Prices were also on the rise in 2004, and they continue to favorably trend upward in 2005. Overall global growth, however, is expected to be slower in 2005 when compared with the robust consumption realized in 2004.
The TiO2 industry remains highly concentrated, with the top-five producers accounting for 70% of the global capacity. Key statistics on the TiO2 industry as well as a breakdown of revenues by the major producers are provided in the report.
The report 'Recovery Under Way for Titanium Dioxide Industry - How Close is the Next Peak?' is available at www.fitchratings.com under the 'Corporate Finance' header, 'Corporates' and 'Special Reports.'
By BUSINESS WIRE / May 3, 2005, CHICAGO
Fitch estimates that annual TiO2 demand needs to average at least 3% over the next decade to maintain operating rates in the mid-90s and above, while also assuming capacity growth of only 1% annually. Based on those assumptions, the next peak for the TiO2 industry is expected in late 2007 or early 2008. The profitability of the peak will depend on the rate of demand growth and amount of discipline shown by major producers to steadily increase capacity.
After TiO2 producers struggled with three years of weak business conditions, demand rebounded in 2004 with an estimated 7% growth in worldwide consumption. Strong global growth and improved economic conditions in the U.S. propelled TiO2 demand. Prices were also on the rise in 2004, and they continue to favorably trend upward in 2005. Overall global growth, however, is expected to be slower in 2005 when compared with the robust consumption realized in 2004.
The TiO2 industry remains highly concentrated, with the top-five producers accounting for 70% of the global capacity. Key statistics on the TiO2 industry as well as a breakdown of revenues by the major producers are provided in the report.
The report 'Recovery Under Way for Titanium Dioxide Industry - How Close is the Next Peak?' is available at www.fitchratings.com under the 'Corporate Finance' header, 'Corporates' and 'Special Reports.'
By BUSINESS WIRE / May 3, 2005, CHICAGO
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