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 gray toilette paper/toothpaste. Newspapers too. Paint will get much more expensive, meaning we’ll paint less; our white houses (and White House) will get gray 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 aging.
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!
BK
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Much of the info in this piece comes from this Bloomberg story. (link)
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Bruce, I love your blog. Always something interesting and informative.
ReplyDeleteThank you and Happy Thanksgiving to you too!
At least Bendicte's gloves were blue... I enjoy reading your blog everyday. Thank you and have a great Thanksgiving
ReplyDeleteReally? The old romans ... where the rich men wore their togas white ... used chalk. Ground up limestone. It caked. And, it stayed white.
ReplyDeletePowdered wigs. Also white. The shoulders on men who were be-wigged ... must have looked like dandruff?
As to Brazil. Good luck if that's where the plants are. Turns out the Hezbolla bullies are running rampant in South America! How do you protect yourself from sabotage? Or terrorism?
Yeah. I think people with money ... who are pulling their money out of European banks ... including their Swiss bank accounts ... are looking at commodities.
But investing in Brazil?
Remember those rubber plantations before WW2? Rubber got synthesized ... they're not in tires anymore.
Won't American cities be looking to start producing stuff, again? Wouldn't that draw in investment money?
The Commodities market has always been a mystery to me. I know its there because I've read Jimmy Rogers books. And, I used to watch him on TV.
Heck, you can invest in orange juice futures as a commodity. But don't ask me how! If I take an umbrella with me, it won't rain. So, I've never dabbled in the future.
But, sure. To make white you need titanium. If it wasn't added would pills just become more colorful? Said sarcastically.
Paraguay. Isn't that a bank haven? Don't dictators always make sure they're a safe haven bank where they can put their loot?
ReplyDeleteI'm not sure I understand the "sand" connection. So, I'm guessing titanium is extracted from beach sand ... where the beaches are white.
There's a great scene in Annie Hall where Woody Allen is given some white powder on a "compact." That's worth $500 an ounce. He dabbles a finger into it. He puts it near a nostril. And, he sneezes.
I can think of things that are white besides beach sand.
You know, if you were going to bake a cake ... and you wanted it to be a white cake; all you eliminate is the yolk(s) that go into the cake batter.
What about paper pulp?
I actually thought paint used to contain lead. Lead became something that was considered poisonous ... if a baby ate a paint chip.
How did TD get to be this big of an ingredient, and I never heard about it, before. Or so this ingredient on a pill bottle?
Anyway, commodities are risky business. So, this is an interesting post.
I recently became interested in TD by way of Argex Mining. You speak about the nasty production process, apparently this co. has come up with a new process that has zero tailings/leftovers. Sounds promising.
ReplyDeleteChina and Mongolia are right now working together in the deepest recesses of both countries on new supplies. You need to keep up with current events.
ReplyDeleteYeah, I too was involved with the industry (LBO) many many years ago. It is one of the most corrosive industrial production process in the world.
ReplyDeleteSuch an interesting blog post, thanks for posting Bruce. I've found out some things about titanium that I would never have guessed!
ReplyDeleteI don't think "commodities" are going to become the hot new bonds.
ReplyDeleteBefore the stock market began blowing up with busts ... And, "savings and loans" crises ... bonds were a backwater desk. People who wanted something safe invested in Treasuries. And, got back 3%.
Then, with Moody's about worthless as "value appraisers" ... the laws in the USA got written ... that pension funds could invest in bonds that had Triple-A ratings.
So, even though average investors are not well educated about the products they buy ... they do follow the money.
Today? The whole investment market is spooked. If I didn't absolutely love Jimmy Rogers, I would not have even known you could go on TV. And, talk about commodities ...
People not only listened, some of them dabbled.
In the movie "Changing Places" ... It's the commodities market that takes center stage ... as the duplicitous story tells the tale about two brothers ... who thought they'd corner the market (was it orange juice?) ... By thinking they were getting info a day before the information was going to be published.
But as a market? I'll bet "commodities" will not become the new, new "thing." Or where spooked investors go to bet their money.
Brazil has much more than toxic titanium plants! The arab al-kay-duh ... has come in. And, set up "business." You gotta be real mishugah to put any money into Brazil.
There's more than one way to make white.
And, there's more than one way to lose "your green."
How come there's no discussion here of Jon Corzine's "bet" on the "sure-thing" of repo-to-maturity bonds? Wasn't that an eye-opener for anybody?
This is my Good luck that I found your post which is according to my search and topic, I think you are a great blogger, thanks for helping me out from my problem..
ReplyDeleteSome notes on nanoparticles.
ReplyDeleteA nanoparticle is a particle or agglomeration having one dimension less than 100 nanometers.
Toxicologists are concerned that hitherto benign substances develop toxic properties at nano sizes.
Toxicity varies between routes of exposure: inhalation, ingestion and membrane adsorption (across the skin).
The focus of nanoparticle toxicity studies has been inhalation and ingestion in manufacturing (occupational) environments. The results are controversial (haven't been unequivocally reproduced) in ingestion studies, but are more conclusive in inhalation studies. One of the reasons attributed to the controversial results is the difficulties of producing consistent distributions/concentrations of nanoparticles.
Consumers' exposure to nanoparticles is likely to be very much lower than workers' exposures in the manufacturing processes. To put another way: the future ain't so gray, so long as we can afford to buy products which contain TD.
Starbucks uses brown napkins. Coffee filters come brown now. As people become more educated, some of these products will fall by the wayside.
ReplyDeleteWhich is the best place to find genuine titanium dioxide manufacturer, because every supplier is not genuine.
ReplyDelete