Tronox increases titanium dioxide prices
On December 8, 2016, Tronox (TROX) announced price rises for all of its titanium dioxide grades. The rise in titanium dioxide prices will be effective on January 1, 2017, or as the contract allows.
The rise in titanium dioxide’s price is being made across all regions. In North America, prices rose $0.07 per pound. In the EMEA (Europe, the Middle East, and Africa) region, prices rose $160 per metric ton. In the Asia-Pacific and Latin American regions, prices rose $150 per metric ton.
In 3Q16, Tronox’s titanium dioxide segment reported revenue of $339 million, 11% lower than in the previous year. However, according to a recent study, the market for titanium dioxide is rebounding due to rising product prices. The impact of this price rise will likely be reflected in Tronox’s 1Q17 earnings. Assuming there’s no fall in sales volumes, the rise should boost Tronox’s revenue growth.
Tronox’s stock price
On December 9, 2016, Tronox closed at $11.77 and rose 7.8% for the week. The VanEck Vectors Rare Earth/Strategic Metals ETF (REMX), which held 1.7% in Tronox on December 9, rose 3.6% for the week and closed at $18.31. Tronox’s peers The Chemours Company (CC), Huntsman (HMN), and Kronos (KRO) rose 4.8%, 5.4%, and 4.4%, respectively, in the same period.
Tronox’s stock price closed 32.2% higher than its 100-day moving average of $8.90 on December 9. Its 100-day moving average had risen from $8.03 on November 1, 2016, to $8.90 on December 9, 2016, indicating an upward trend.
Analysts expect Tronox’s 12-month target price to be $11.00. However, the stock is already trading 7% this target price. On a year-to-date basis, Tronox has risen 201%.