Market Watch - Titanium Dioxide Set For Major Growth

Why This Raw Material Is A Positive Growth Indicator for Manufacturers

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A good way to predict what is in store for several Missouri manufacturers is to keep your eyes on the raw material titanium dioxide. Why? Because it is directly connected to pigments. Any manufacturing process that involves paint coatings is directly affected by the outlook of this key raw product.

Nothing can happen in manufacturing without a good supply of of titanium dioxide. Raw material suppliers base their production on the outlook of manufacturing itself, which means they are doing their homework on the economic outlook for the manufacturing industry itself.

As we speak, the prognosticators are talking about titanium dioxide becoming a growth industry between the present time and the year 2024. It feeds into the market for paint coatings, paper & pulp, textiles, plastics, rubber, cosmetics, printing inks, catalysts, welding electrodes, food colorants, water treatment agents, and pharmaceutical products.

There’s also a lot of talk going on about the rise in use of polycarbonate plastics in the automobile industry due to demand for lighter weight vehicles, and also products relating to building construction. Titanium dioxide provides the needed protection for these materials which have a low scratch resistance. A rise in plastics plastics production will require an increase in the supply of these protective coatings.

Most of my research points to the use of titanium dioxide in paint coatings first and foremost at 58%, with polycarbonates coming in second. Take special note to the fact that production of water-based paints is on the rise, and this raw material plays a big role in their use and development.

It’s pretty safe to say that titanium dioxide production is a key forecasting agent for market growth, and is definitely something we need to keep our eyes on as a consideration for how much production the Missouri market will be able to soak up for our manufacturers.

I’ll be digging up even more of these key market indicators in the coming weeks. There are about five that I have my eyes on, and I will keep you posted.

Carlton Flowers
Carlton’s Industry List

2018 Oil Crash - The Potential Effect of Falling Oil Prices on Manufacturing

The Positive & Negative Outcome of Lower Oil Prices to Consider

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If you’ve been watching the news, you might have seen that Oil prices are taking a nose dive. WTI Crude is currently sitting at $56.75 at the time I’m writing this post, which is just barely a notch above the low point. This is a definite bear market for oil, and the slide has been steady for a few months now.

Some say that this is the low point, and others say that there will be one more nose dive before it’s over. Whatever the case, the effect is going to be the same, and it’s something that everyone needs to take note of. Now is the time to take into considerations the positive and potentially negative impact of this slide on the economic outlook for Missouri manufacturing.

Let’s start with the positive impact. The most obvious impact will be lower prices at the fuel pump. That means consumers will have more buying power, and it might spur strong retail sales, especially during the holiday season. Consumer spending could stay strong for several months as a result, so this will have a definite impact on those of you who are manufacturing end-user products. B2B manufacturing may not see a spike in sales, but it is possible.

Lower oil prices mean cheaper oil-based chemicals. Those of you in the manufacturing industry that depend heavily on solvents and other oil-based products will probably see a drop in supplier pricing. It might take a while to trickle down, but there will be an effect. So you can count on a little wiggle room in your supply budget soon.

Now let’s look at the down-side. The bear market can have several negative impacts on your bottom line that could offset the positive. So it’s worth considering for your short-term production planning.

When oil prices fall sharply, you would automatically think that automobile sales would spike. That’s not necessarily true. In the past, consumers actually sit on the sidelines and wait to see what the future holds before spending on new cars. Consumers might think, “do I buy that SUV, or should I play it safe and get the small hybrid?”

While we have such volatility in the price of oil, it’s hard for consumers to feel secure in making firm decisions on big ticket purchases like cars. People will often wait until gas prices stabilize before finalizing a new car sale. So if you are somewhere in the supply chain for automobile production, don’t bet the farm on a big increase in buying just because gas prices drop.

If you are exporting, you better do your homework. A drop like this in oil prices has an effect on the strength of the dollar. As oil price drops and the dollar strengthens in value, that’s good for everyone except the countries who are BUYING from the US. A stronger dollar means less buying power for US goods. It’s really a complex relationship. But watch out if you are involved in export trade, or gearing up to expand into trade.

The long-term negative potential impact of the oil price drop would be the economy as a whole. This could be an indication of an impending recession. Couple this with the stock market action, and it very well could be the start of a big slow down.

The bottom line is, you better plan for the worst. There could be a nice spike in demand the short run, but the prospect of an economic slowdown certainly is a possibility.

How has the oil bear market affected the numbers for your facility, if any? Have you considered these factors in your immediate or long-term operational plans? I’m looking forward to hearing your input, and encourage you all to share.

Carlton Flowers
Carlton’s Industry List

Carlton's Industry List Blog Has Launched! What to Expect

Welcome to the Industry List Blog - What’s In Store

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Welcome aboard everyone, Carlton’s Industry List Blog has officially started! I’d like to take a few minutes to let you know what I have in store for you and explain what this will be all about.

The Industry List blog site will be my communication tool for sharing cutting-edge information as it happens with the manufacturing industry, the agricultural sector, construction industry, consulting firms, small businesses, and municipalities alike.

You’ll be the first to know about changes in regulations, trends, economic developments, and key factors that can affect your operation before it becomes available in the regular news networks. My goal is to provide highly valuable content that will help you in decision making and planning to keep up with the current state of industry.

You can expect about two to three blog posts per month. I encourage everyone to chime in and comment with your thoughts, insight, and questions about the topics that I bring to your attention. Collaboration among the members will be the key to making this work in the most beneficial way for everyone.

Here’s a summary of the types of articles that I will be bringing to you regularly:

  • changes in regulations and pending legislative action

  • trends in regulatory practices

  • best practices for industry efficiency

  • key insight on developments within various niches

  • opportunities for energy cost reduction and utility rebates

As we move forward, my goal is to be your point-man for information and be the central hub for all of you, my closest friends who are in this group. Keep your eyes peeled, and be ready to share your thoughts and interact!

Carlton Flowers
Carlton’s Industry List