DuPont Reaffirms Outlook for Titanium Dioxide, Sees Strong Demand Over Ore
07/10/2012| 12:03pm US/Eastern
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By Victoria Stilwell
DuPont Co. (>> E I Du Pont De Nemours And Co) reaffirmed its full-year and long-term outlook for titanium dioxide amid recent fears about weak demand in the pigment industry for the second half of the year.
DuPont--the bigger maker of the pigment and one of the best leading indicators of broader industrial production--said it expects demand for titanium dioxide to be stronger than that of ore, partially due to changes in inventory levels. The company said recent comments regarding market demand "overstate the softness in the pigment industry." The company plans to offer additional perspective when it reports second-quarter earnings on July 24.
Australian rival Iluka Resources Ltd. (ILU.AX) earlier this week cut its full-year sales volume outlook for titanium dioxide, a key pigment used to make paints, a move that pressured stocks across the sector. The company also said it is reviewing its spending plans and considering further cutbacks to output to deal with slowing demand and a subsequent inventory buildup.
Meanwhile, Jefferies earlier this month cut its 2012 and 2013 views and downgraded DuPont to hold to reflect a weaker demand outlook in Europe and "incremental deterioration" in the titanium-dioxide space. The investment bank said price increases were stalling earlier than expected.
DuPont in April reported its first-quarter profit rose 4% as the company benefited from higher pricing and a jump in sales of agricultural products, as well as strong growth in developing markets.
Shares rose 1.6% to $48.22 in recent trading after sliding 2.9% Monday. The stock is down 5.6% over the past three months.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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