Tronox mulls chlorine projects, expects logistics issues to last through H2

HOUSTON (ICIS)–Tronox is considering chlorine production projects to improve availability of the material at its titanium dioxide (TiO2) sites, the top executives of the international integrated pigment producer said on Thursday.

The company makes much of its TiO2 uses a chloride process, in which feedstocks – slag, synthetic rutile, natural rutile or ilmenite ores – are reacted with chlorine and carbon.

Outside of North America, Tronox has purpose-built chlorine capacity at some of its TiO2 production sites, and it is a seller of caustic soda into the market. Caustic soda is a co-product of chlorine. At other sites, the company is a merchant buyer of chlorine.

In Q2, Tronox experienced chlorine availability constraints, and the issues are expected to impact the company’s TiO2 business in the current Q3 as well, co-CEOs John Romano and Jean-François Turgeon told analysts during Tronox’s Q2 earnings call.

“Depending on what is happening in the market, we are going to look at [building chlorine facilities]” in the US and elsewhere, Turgeon said.

“If there is a good business case for us, we can do it. It’s not rocket science,” he said.

At the same time, Tronox will keep working with its chlorine suppliers, the executives said.

Also, as an integrated TiO2 producer, Tronox is able to rearrange feedstock supplies to ensure that its 225,000 tonne/year US chloride-based TiO2 plant in Hamilton, Mississippi, receives higher-grade feedstock, thus reducing chlorine requirements there, they added.

LOGISTICS ISSUES TO LAST THROUGH H2
In addition to the chlorine issues, the continuing global supply and logistics constraints that limit vessel and container availability will impact Tronox’s TiO2 business in Q3.

The company currently expects Q3 sales volumes down 5-10% sequentially from record Q2 levels because of the logistics squeeze, the executives said.

While earlier in 2021 Tronox had expected an improvement in H2, it now sees  the supply issues continuing through the end of the year, they said.

“The reality is that everything is still very, very tight,” said Turgeon.

“It’s still a challenge to get vessels, to get containers,” he said.

SOUTH AFRICA
In addition, in South Africa impacts from recent social unrest and riots could cause port disruptions, thus delaying Tronox’s feedstock shipments.

However, despite the unrest, “things are improving” in South Africa, compared with conditions under former President Jacob Zuma, Turgeon said.

Tronox has mineral sands operations on the eastern coast of South Africa, consisting of a mine, a concentration plant, a mineral separation plant and two smelting furnaces that produce titanium slag.

Furthermore, it has operations on the country’s western coast, consisting of a mine, two concentration plants, a mineral separation plant, as well as two smelting furnaces that produce titanium slag.

DEMAND
Meanwhile, Tronox continues to see strong demand for its TiO2.

While demand growth has moderated a bit in China, “we have not seen demand weaken at all”, the executives said.

Demand will be pent up until the logistics issues are resolved, they added.

Thumbnail photo shows white paint. TiO2 is a white pigment. Image by Shutterstock.