Sunscreen manufacturers are having a rough time at the moment. Not only has the great British summer washout killed off most of the usual demand for sun protection, they are also having to cope with soaring prices on a key sunscreen ingredient.
Titanium dioxide - which is used in sunscreen to block out UV rays but can also be found in other creams, toothpastes and even some foods, such as cottage cheese - has risen spectacularly in recent times and, at £3,000/tonne [Mintec], is now 75% more expensive than it was at the start of 2011. And prices are unlikely to come down any time soon.
Titanium dioxide prices have soared because of increased demand for titanium from the commercial aerospace sector and industrial markets.
“The past couple of years have seen a severe supply-demand imbalance for all types of titanium dioxide,” says Jennifer Hart, a sales director at ingredients supplier Croda.
Commodity risers and fallers 14 July 2012
The wrong weather of every kind is troubling the grains markets. Concerns about excessively dry conditions in the US grain belt and cold and wet conditions in the UK and key western European wheat-growing countries like France and Germany have been putting pressure on feed and milling wheat markets, sending prices higher.
Not all grains have been caught up in the malaise, though. Rye caused concerns earlier in the year but prices are now relenting - at £195.08/t, they are 6.1% cheaper than last year, having fallen a further 5.6% in the past month. Oats are also significantly cheaper, largely due to improved plantings, with prices now about 20% lower year-on-year and month-on-month.
The upshot is bad news for sunscreen manufacturers, for whom titanium dioxide is considered expensive anyway. The biggest impact has been on high-SPF creams, which need larger amounts of titanium dioxide, and mineral-only formulations, although the latter tend to be used primarily by niche, natural brands, which can find it easier to command premium prices and pass on price increases to consumers.
The situation is unlikely to improve until 2015, believes Hart, when additional titanium production capacity is due to come on-stream.
However, it’s not all bad news for the personal care sector. Other commonly used ingredients, such as palm oil and coconut oil, have been dropping in price. Last week, Bernstein Research reported its household and personal care commodity index, which tracks 15 equally weighted inputs, was down 13.2% year-on-year.
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