Iluka Resources’ Jacinth-Ambrosia ilmenite-zircon project in South Australia. Ongoing antidumping investigations into Chinese titanium dioxide imports into the EU could ‘reset’ the bloc’s pigment industry and boost demand.
Source: Iluka Resources.
The European Commission’s ongoing antidumping investigation into imports of titanium dioxide from China could “reset” Europe’s pigment industry and aid demand, according to mineral sands producer Iluka Resources Ltd.
The European Titanium Dioxide Ad Hoc Coalition said in November 2023 that titanium dioxide imports into the EU from China had “sharply and continually increased over the past years,” leading to several EU factories ceasing titanium dioxide production. The probe is determining whether imports of titanium dioxide from China have been dumped on the EU market and whether they have caused material injury to EU industry.
On a Feb. 21 analyst call, CEO Tom O’Leary said most of Iluka’s titanium feedstock customers are “closely following antidumping proceedings being undertaken by the European Commission, which are a potential catalyst to reset the European pigment industry.”
Iluka sees a brighter outlook emerging from the commission’s investigation.
Matt Blackwell, Iluka’s head of major projects and marketing, told analysts that there is “a gap of almost US$1,000 a [metric] ton between the Chinese product and the European produced product” and that potential duties of 45% to 60% could be imposed.
This would “make it less attractive for consumers of pigment in the EU to buy that product coming from China, [and] revert back to domestic production, which would then increase the operating rates of those assets in Europe,” Blackwell said.
“So we would expect to see them increase their operating rates, which we think is good for the long-term state of the pigment industry in Europe and also good for our high-grade feedstock offtakes, which become more in demand when people are running at higher rates.”
The European Commission expects the investigation to run for no more than 14 months. Provisional duties could be imposed within seven months of the probe’s launch.
Ready for a rebound
The European antidumping investigation will likely bring “some volume shift and some pricing opportunity,” said John Romano, co-CEO of the world’s largest titanium chemicals supplier Tronox Holdings PLC.
“We expect 2024 to see a reversal of several of the trends for the last 18 months,” Romano told a Feb. 16 analyst call. “We’ve already begun to see a pickup in demand for [titanium dioxide] that is more positive than we would see normally at this time of year. January sales were strong, and we’re seeing continued strengthening in the market for February and March order books.”
The magnitude of the recovery will be somewhat dependent on China, Romano said, but “even without that significant shift in China, we’re seeing demand recover.”
While Europe’s production was negatively affected by Chinese pigment imports, “North American pigment producers’ price and volume discipline supported pigment prices in 2023 and prevented significant inventory build,” Iluka’s full-year presentation said.
Iluka reported a 42% plunge in net profit to A$343 million in 2023, with mineral sands revenue down 19% to A$1.24 billion.
