Chinese producers pass on high raw material costs as inflation risks grow
- The price of titanium dioxide, a key ingredient in paint and coatings, has jumped as producer price inflation has increased in China
- There are now signs upstream producers may be passing rising raw material costs downstream to smaller businesses and consumers
The price in China for titanium dioxide, a key ingredient in paint, has surged along with industrial metals and coal in recent weeks, showing how production inflation is rippling through the world’s No 2 economy.
In mid-October, several Chinese paint companies posted notices online that prices for domestic and industrial paints, along with construction products that rely on them, would increase by 40 per cent.
The culprit behind the price hikes is titanium dioxide, a key ingredient in making paint and coatings.
Prices for the pigment, which comes in powder form, have surged by more than 50 per cent since February due to growing industrial activity in China, analysts say.
What remains to be seen is whether the energy supply can stabilise in the coming months
Thomas Kavanagh, associate editor at commodities analyst Argus Media, said the power crisis is set to affect all parts of the titanium supply chain.