Page 23 - 201902 SCA February 2019 Volume 56 Number 1

FEBRUARY
2019

4. What is the supply/demand outlook for the
near future?
Growth indicators for North America, Europe,
China, and Brazil underpin steady demand for TiO .
2
Examples include GDP increases, U.S. manufacturing
capacity utilization benchmarked by the Federal
Research System (see Figure 3), and the purchasing
managers’ index (PMI). The key is high capacity
utilization, which will likely temper price increases
in 2018 and beyond. Potentially, TiO could enjoy an
2
extended period of steady profitability and stable
pricing. Yet, I am only cautiously optimistic because Figure 2: TiO Pricing vs. Inflation Adjustment - 1970 - 2020E.
2
historically such a trend would invariably lead to Source: Artikol and Wells Fargo Securities, LLC (2017).
overbuilding of capacity and subsequent oversupply.

5. Are pending regulations likely to be a
headwind for TiO supply?
2
Pressure is mounting in Europe to label TiO as a
2
potential human carcinogen based on inhalation.
European authorities will likely announce their ruling
later this year. If enacted, the European legislation’s
overall impact may be muted due to TiO ’s limited
2
direct contact with consumers (as it is typically
encapsulated in liquid or solid media as in paints Figure 3: Capacity Utilization: Manufacturing (NAICS), Percent of Capacity,
Quarterly, Seasonally Adjusted.
and plastics). Conceivably, regulators may scrutinize Source: Federal Research Economic Data, Economic Research Division
continued next page (Federal Reserve Bank of St. Louis).

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Journal of Surface Coatings Australia