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    Editorial

    Raw Material Supply Issues Take Center Stage

    ...

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    Kerry Pianoforte, Editor01.08.18
    As we enter into 2018 raw material supply issues seem to be at the forefront of the news regarding the paint and coatings industry. Over the last several weeks (and months), the proposed merger between titanium dioxide giants Tronox and Cristal, has been a hot issue.  Recently, the Federal Trade Commission issued an administrative complaint challenging the merger of these two top suppliers of chloride process titanium dioxide (TiO2)

    The FTC’s administrative complaint charged that Tronox Limited’s proposed acquisition of competitor Cristal, for $1.67 billion and a 24 percent stake in the combined entity, would violate the antitrust laws by significantly reducing competition in the North American market (comprised of the United States and Canada) for chloride process titanium dioxide. The FTC alleges that the acquisition, if consummated, would increase the risk of coordinated action among the remaining competitors, and increase the risk of future anticompetitive output reductions by Tronox.

    TiO2 and other raw materials were a subject discussed in our Pigments Report (p, 38). Robert Poemer of Heucotech said, “One of the major challenges for pigments is the availability and pricing of raw materials. This starts from the global availability and pricing of TiO2.  There are also significant price increases for other metals like Cobalt, Zinc and Copper where very significant amounts are being dedicated for electric vehicles.”

    Our Russia correspondent, Vladislav Vorotniko also addressed supply issues in this month’s column “Russian Coatings Industry Gradually Shifts to Domestic Raw Materials”
    Russia has been importing most of the raw materials it needs for the coatings industry. However, things started changing in recent years as new production capacities were established in the country and the Russian government has given the trend additional momentum with the announcement that starting in 2018, the use of domestic raw materials will be mandatory for both Russian manufacturers and the localized plants of the foreign companies. 

    In terms of TiO2 Russia was a net importer prior to 2014, purchasing from 67,000 tons to 82,000 tons per year, primarily from  plants in U.S., Germany and China.  In 2014 when Russia annexed the Crimean Peninsula from Ukraine, it gained control over  Crimean Titan – the largest manufacturer of TiO2 in the  post Soviet space.

    In 2016 Crimean Titan manufactured 75,000 tons of TiO2 and plans to commence a major expansion program in 2020, bringing production capacities to nearly 155,000 tons of TiO2 per year. 
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