Tronox Rises in Anticipation of Increased Pigment Profit

Tronox Inc. (TROX), the largest integrated maker of titanium dioxide, had its biggest two-day gain in 14 months as investors anticipate profit from the white pigment used in paint and plastics will rebound in 2013.

Tronox, based in Stamford, Connecticut, rose 9.8 percent to $19.08 at the close in New York. The shares have gained 21 percent this week, the biggest two-day increase since Oct. 7, 2011, according to data compiled by Bloomberg.

Excess inventories of titanium dioxide are being worked down, aided by a U.S. housing recovery and faster economic growth in China, and profit should start to recover from the decline in the second quarter, said Edward P. Mally, an analyst at Imperial Capital LLC.

“The conditions are set up to support a recovery in Tronox earnings and potential growth in 2013,” Mally, who rates the shares outperform, the equivalent of a buy rating, said by phone today. “The stock had gotten oversold in the face of uncertainty in their outlook.”

Tronox got a boost from a Dec. 15 report in Barron’s that highlighted signs of a potential recovery in the pigment, known by its chemical formula TiO2, Mally said. The story said Tronox shares may double in the next year.

The company in November reported “weak” TiO2 demand and said sales should begin to increase in 2013.

Tronox in June acquired controlling interests in Exxaro Resources Ltd. (EXX)’s mineral-sands operations to become the world’s biggest integrated maker of titanium dioxide.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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