Years ago I
got involved with financing a Titanium Dioxide plant in Brazil. I’ve had an eye on this commodity ever since. What I find interesting about TiO2 (“TD”) is that everything that you look at that is white has this stuff in it. From pills to food to paper to paint, if it’s white, it’s TD.
Demand for this stuff has been on a tear; rising at ~20% a year. World consumption is 2 pounds of ‘white’ per person. That’s the average for all 7 billion of us. The western countries consume about 8 pounds per person. China is just up to 1 pound. That’s where the demand is coming from. (The US uses the most TD, about 9 pounds per person)
Prices are going through the roof; up 38% this year. The raw material, rutile, has seen its price rise by a whopping 77%. Demand is projected to increase another 50% in 2012 (Link). The price has nowhere to go but up (Blame China for everything).
There are some similarities between the TD story and RE minerals. Neither of them are rare (there’s 100Xs more titanium on the earth than copper). The problem is that making the stuff (REs or TiO2) is a nasty process (both have to be boiled in sulfuric acid).
The raw material for TD is found in beach sand. The areas where there is currently significant production include South Africa, Australia , Canada and China. (There may be a new monster find in Paraguay. (Link) The manufacturing process stinks (literally).
Is this a big deal? Here’s another example of a “scarce” commodity that everyone uses. It’s another one that China is driving the supply and the pricing. I don’t think it will move the needle much on the broader inflation numbers. As the price keeps rising they will just put less TD in things.
So look forward to grey toilette paper/toothpaste. Newspapers too. Paint will get much more expensive, meaning we’ll paint less; our white houses (and White House) will get grey with age.
There might be a bright side to the coming graying. We may end up living longer. PD has long been considered a carcinogen. OSHA has warnings for those who work in plants that make the stuff. California put it on its list of carcinogenic substances earlier this year.
Bendicte Trouiller a UCLA molecular biologist studied TD on rats. Some conclusions from her efforts:
Consuming the nano-titanium dioxide was damaging or destroying the rats’ DNA and chromosomes. The biological havoc continued as she repeated the studies again and again. It was a significant finding: The degrees of DNA damage and genetic instability can be “linked to all the big killers of man, namely cancer, heart disease, neurological disease and ageing.
If you’re wondering if you our eating/drinking this stuff, you are. Follows is a list where TD may be found. The bad news is that TD is in beer, wine and “distilled spirituous alcoholic beverages.” (I don’t give a damn. I’ll have my share of those spirituous beverages). The good news is that a traditional Thanksgiving meal contains very little TD.
Enjoy your feast!
Much of the info in this piece comes from this Bloomberg story. (link)
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.