Tronox falls 2.8% on $80M charge from China plant closure
Titanium dioxide producer shuts Fuzhou facility amid weak demand, surplus capacity in Chinese market
Tronox Holdings shares fell 2.8% on Monday after the titanium dioxide producer announced it would permanently close its pigment plant in Fuzhou, China, incurring up to $80 million in charges and eliminating approximately 550 jobs as it confronts weakening demand and cost pressures in the world's largest TiO2 market.
The Stamford, Connecticut-based company said it expects to record restructuring and related charges of $60 million to $80 million in the fourth quarter of 2025, including $35 million to $45 million in non-cash asset write-downs. The closure represents roughly 6 to 8% of Tronox's $997 million market capitalization.
The Fuzhou facility, which Tronox acquired as part of its 2019 purchase of Cristal, has an annual production capacity of 46,000 metric tons of titanium dioxide pigment, a material used in coatings, plastics, and paper. The company cited ongoing weak domestic demand in China, rising costs for raw materials including sulfur, and persistent production surpluses in the Chinese TiO2 market as factors driving the decision.
"The closure is part of our ongoing efforts to optimize our global asset portfolio and improve our cost structure," the company stated in a press release. Tronox expects to achieve annual cost savings exceeding $15 million from the shutdown.
The announcement marks Tronox's second major plant closure in less than a year. In March 2025, the company permanently shut down its Botlek, Netherlands facility, which had 90,000 tons of annual capacity and affected 240 employees. That closure, which also resulted from strategic asset portfolio optimization, incurred $130 million to $160 million in charges but was projected to deliver more than $30 million in annual cost savings beginning in 2026.
China's TiO2 market has faced persistent challenges in recent years, with domestic producers expanding capacity amid slowing economic growth and weaker demand from key end markets such as construction and automotive. The industry has struggled with oversupply, putting pressure on margins and forcing global producers to reassess their global footprint.
Tronox, which reported $2.84 billion in revenue over the trailing twelve months, has been working to reduce costs and improve operational efficiency. The company's forward price-to-earnings ratio stands at 21.83, reflecting investor expectations of improved profitability. Analysts have an average target price of $5.59 on the stock, according to consensus estimates, compared to Monday's trading price around $6.29.
The company's shares have rebounded from a 52-week low of $2.82 reached earlier this year, helped in part by a January 21 upgrade from Truist Financial, which raised its price target to $7.00 from $5.00 while maintaining a buy rating. However, Monday's decline underscored investor concerns about the near-term financial impact of the Chinese plant closure and the broader challenges facing the global TiO2 industry.
Tronox said the closure process would proceed in accordance with local regulations and that it would provide support to affected employees. The company did not disclose a specific timeline for completing the shutdown.
Investors will be watching for details on Tronox's preliminary fourth-quarter 2025 financial results, which were released alongside the closure announcement, when the company reports full earnings. The charges from the Chinese plant closure are expected to weigh on quarterly results, though management emphasized the long-term benefits of a leaner, more efficient operating structure.