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FOCUS Iron oxide pigment prices also increased during 1999/2000, against a background of higher demand, then fell back in 2001 as consumption growth eased. But iron oxide pigment suppliers pushed through price increases in 2002, resulting in a rise in the index to 117.7 in 2Q 2002. It has fallen back somewhat since then, but not dramatically. In the latest recorded quarter of this year, the price index of iron oxide pigments was 117.0. The “other inorganic pigments” category includes notably chrome yellow, chrome oxide green, ultramarine, lithopone, Prussian blue and bismuth vanadate. Tonnage consumption is relatively small, compared against iron oxide and TiO2 pigments. The overall price index for this category increased from 100 in 1Q 1992 to 103.4 in 3Q 1992, then dropped to a low point of 94.1 in 4Q 1993. It then rose to an all-time peak of 108.3 in 2Q 1997, then dropped back to 98.1 in 2Q 2003. There were signs of a long-awaited revival in 3Q 2003, with the index moving back up to 100.0: this means that the price paid by customers as we near the end of 2003 is roughly the same as the price paid about 12 years ago! Carbon black prices continue to buck the general trend. In fact, there was quite an upsurge in carbon black prices earlier this year, essentially reflecting the sudden rise in crude oil and natural gas prices. Over the period 1992-2003, carbon black prices have increased at an average annual equivalent rate of 5.3% – more than double the rate of general (CPI) price inflation. Although carbon black is one of the major pigments, in terms of tonnage usage, nearly 90% of US carbon black consumption is accounted for by the rubber industry, principally in the manufacture of tyres. Clearly, the tyre manufacturers have not been able to pass on carbon black price increases experienced during the past decade. Throughout most of that time, the price index for tyres has been less than 100 (base 1Q 1992 = 100), though there has been some slight upward movement this year. Among other pigment end-use sectors, the architectural (building) paint sector has been able to keep its prices more or less in line with the CPI. By contrast, manufacturers of OEM paints (including automotive

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paints) have struggled to keep up. The average OEM paint price index for full-year 2003 is going to be less than 1% higher than last year. At the other end of the spectrum, suppliers of special-purpose paints are likely to see an increase of around 3% in the full-year index, following increases of 4-5% per annum in every year since 1998. The manufacturers of printing and writing papers tend to be the most important pigment consumers in the paper industry. The average price index for printing and writing papers has shown relatively little change since the beginning of 2000. At the same time, printing ink manufacturers have experienced a slight decline, with the full-year price index for 2003 expected to be about 1.5% lower than the 2002 level. All in all, pigment suppliers need to guard against generating overcapacity and accumulating excessive inventories if they are going to improve on their past record of pricing, so as to give themselves a decent rate of return at the same time as giving their customers a sense of assurance of long-term continuity of supply and product quality. Reg Adams

PLANTS Argentina & Brazil: Ampacet – plastics masterbatch By the end of 2004, Ampacet plans to install masterbatch facilities at its Argentinian plant, designed to cater for the local polypropylene plastic film market. At its Sao Paulo (Brazil) plant, Ampacet intends to install a small-lot custom colour production unit. Worldwide, Ampacet’s sales are expected to increase by 10% to reach $550 M. Plastics News, 14 Nov 2003, (Website: http://www.plasticsnews.com)

Brazil: Degussa – carbon black Degussa formally inaugurated its new carbon black plant at Paulinia (in Sao Paulo province) in March 2003 and the plant is now running at its nameplate capacity rate of 55,000 tonnes/y. Investment in the project

was $60 M and the plant took about two years to build. Its commissioning brought to 18 the total number of Degussa’s carbon black plants worldwide. Last year, Brazil imported $15 M worth of carbon black and the start-up of the Paulinia plant may be expected to bring about a reduction in imports. European Paint and Resin News, Sep 2003, 41 (9), 11

China: Baotou – rare earth luminescent pigments The Nei Monggol (aka Inner Mongolia) province of China is rather remote and in the past it has not benefited much from inward investment. There are several important rare earth deposits and several projects have been proposed which would involve opening-up some of these deposits. Virtually all these projects are in the Baotou Hi-Tech Zone. One of them calls for the introduction of a new 3000 tonnes/y rare earth luminescent pigments plant, which would generate annual pre-tax profits of Yuan 10 M on annual sales of Yuan 22 M. China Chemical Reporter, 26 Oct 2003, 14 (30), 7

China: China United Rubber – carbon black from plastic waste China United Rubber group has invested Yuan 50 M to establish a plant at Zigong (Sichuan province), designed to recover 20,000 tonnes/y of carbon black from post-consumer plastic waste. China Chemical Reporter, 26 Oct 2003, 14 (30), 12

China: Clariant – plastics masterbatch Clariant is poised to open its third plastics masterbatch plant in China next January. The new plant is located on a 2700 square metres site in Beijing; the first two plants were in Guangdong and Shanghai. Output from the new plant – mainly coloured and additive masterbatches – will be directed mainly towards companies in northern China. Also on the Beijing site Clariant has offices and a research laboratory. Meanwhile, the company’s second masterbatch plant is due to be relocated within the Shanghai area. Plastics News, 30 Oct 2003, (Website: http://www.plasticsnews.com)

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