Paint Companies Under Extreme Pressure from Soaring Raw Material, Energy, and Freight Costs Face New Round of Price Increases; Titanium Dioxide Producers Quickly Follow Suit

Paint manufacturers, whose profits have been severely squeezed by skyrocketing raw material, energy, and shipping costs, have just started a new round of price hikes. Before this pressure could ease, titanium dioxide (TiO₂) producers have eagerly jumped in to “stab another knife,” attempting to further increase prices. Recently, multiple TiO₂ companies—including Tronox, Chemours, Kronos, and Venator—have issued price increase notices. Several firms have announced that starting April 1, their TiO₂ product prices will rise by USD 400 per ton.

On February 28, Chemours announced that, effective April 1, 2022, all specifications of Ti-Pure™ TiO₂ purchased in the Greater China region will increase by USD 200 per ton, subject to contract or legal permissions.

Venator stated that starting April 1, 2022, it will raise prices by USD 400 per ton for all TiO₂ products sold in the EMEA region for applications such as coatings, inks, and paper. Venator explained that the company is currently experiencing unprecedented and significant increases in raw material and freight costs, especially energy costs at its European manufacturing plants. Given the volatility and unpredictability of these costs, the company will adjust prices monthly as needed.

Tronox has announced price adjustments for all TiONA® and TiKON™ TiO₂ products sold in Europe by EUR 150 per ton, and by USD 175 per ton or EUR 155 per ton in the Middle East, Africa, and Eastern Europe. Tronox stated it will operate its assets at high utilization rates to meet strong market demand and is making substantial investments to ensure long-term sustainable operations. As highlighted in the company’s Q4 earnings, cost pressures from energy, processing chemicals, other raw materials, and freight will continue into Q2 2022. Therefore, the company deems this price adjustment necessary to offset these higher costs.

Kronos also announced a price increase of USD 200 per ton on all TiO₂ products effective April 1. Kronos cited ongoing strong market demand and the need to mitigate rising costs across all business areas as reasons for the price hike. Recently, the escalating Russia-Ukraine conflict has worsened an already tight energy supply-demand balance, causing energy prices to “run wild,” and surging crude oil and gold prices have caused volatility in commodity markets. The uncertainty surrounding the Ukraine situation has temporarily boosted commodity prices and negatively impacted an already strained global supply chain, though the sustainability of this impact remains uncertain.

Since last year, the sustained high prices of chemical raw materials have benefited many chemical companies, with over 70% reporting favorable annual results. According to disclosed 2021 forecasts, chemical raw material giant Wanhua Chemical posted profits of RMB 24–25.2 billion, up 139%–151% year-over-year; titanium dioxide giant Lomon Billions earned RMB 4.577–5.722 billion, up 100%–150%; phosphorus chemical giant Yuntianhua reported profits of RMB 3.5–3.7 billion, soaring 1186.59%–1260.11%; rubber additive giant Yanggu Huatai made RMB 289–302 million, up 130%–140% year-over-year… The favorable market conditions for chemical raw material companies are expected to continue into the first half of 2022. However, the cost pressures caused by supply shocks have severely squeezed paint manufacturers, many of whom face rising revenue but declining profits.

Since the start of this year, due to the sharp and sustained increases in prices of emulsion, titanium dioxide, additives, and other paint raw materials, paint product costs have surged dramatically. Numerous paint companies, including AkzoNobel, Nippon Paint, Skshu Paint, Carpoly, Bades, Huarun Paint, Zhancheng, Keshun, Sherwin-Williams, and Kansai, have announced price increases.

The continuous rise in raw material prices has steadily eroded paint companies’ profit margins. Besides those who have already issued price increase notices, many other paint companies are preparing to raise prices. As raw material and freight costs continue to rise, more companies are reaching a breaking point. A large wave of price hikes is on the way…