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TiO2 Restriction Lifted; Supplies Still Tight

Tuesday, November 30, 2010

Cristal Global, the world’s No. 2 producer of titanium dioxide, has lifted its declaration of Force Majeure with respect to all TiO2 products for coatings applications manufactured at its facility in Ashtabula, OH.

However, product supplies will remain tight indefinitely, the company said.

"We are pleased to be able to lift the Force Majeure declaration; however, demand in the marketplace for TiO2 remains strong and supply is limited,” said Mark Stoll, VP - Commercial. “This means that even with the lifting of the declaration, we anticipate continued tight sales control for the foreseeable future."

The company declared the Force Majeure on Sept. 26 but gave no reason for the move, saying only that the action was “the result of an unanticipated production issue outside of [the company’s] control that forced the facility to suspend operations.”

A Force Majeure is a contract clause that relieves a party of liability if it is unable to perform its obligations in cases of natural disaster or other factors outside the company’s control.

The declaration came about a month after Cristal Global announced that it would close its TiO2 plant in Baltimore, MD. The Hawkins Point Plant was idled in March 2009, a victim of the economic downturn. Despite recently improved demand for titanium dioxide, the long-term outlook for the facility remained unfavorable, the company said.

The Hawkins Point plant, established in 1954, was one of the company’s eight TiO2 manufacturing plants worldwide.

Raw Materials Crunch

Other raw materials suppliers in the coatings industry have resorted to a Force Majeure this year. Most were running at very low capacity, due to the global recession, and were caught with limited inventory when demand rebounded.

Lucite International Inc., the world’s largest single producer of Methyl Methacrylate, made a declaration this summer regarding supplies of MMA, due to unspecified problems at its plant in Memphis, TN.

The Dow Chemical Company also announced a Force Majeure in May, due to unspecified “production issues” at its MMA plant in Deer Park, TX.

Both of those declarations have been lifted.

Price Increases Announced

Cristal Global is the world's second-largest producer of titanium dioxide and a leading producer of titanium chemicals. Cristal Global operates eight manufacturing plants in six countries on five continents and employs nearly 4,000 people worldwide.

The day after lifting the Force Majeure, Cristal Global announced price increases of varying amounts for all of its Cristal titanium dioxide products sold worldwide.