Tronox Q2 2026 Earnings Report

Tronox EPS Results

• Actual EPS: -$0.51
• Consensus EPS: -$0.38
• Beat/Miss: Missed by -$0.13
• One Year Ago EPS: -$0.28

Tronox Revenue Results

• Actual Revenue: $868.00 million
• Expected Revenue: $832.59 million
• Beat/Miss: Beat by +$35.41 million
• YoY Revenue Growth: +18.70%

Tronox Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 9:00AM ET

Tronox (NYSE:TROX) is a vertically integrated global producer of titanium dioxide (TiO₂) pigment and specialty materials. The company’s operations encompass the full supply chain for TiO₂, from mining and processing titanium-bearing ores—such as ilmenite and rutile—to the production of high-purity pigment for use in paints, coatings, plastics, paper and other industrial applications. In addition to TiO₂, Tronox’s product portfolio includes zircon, rare earth byproducts and other specialty minerals that serve a range of industrial markets.

Tronox operates a network of mines, processing facilities and pigment plants located across North America, Europe, the Middle East, Australia and South Africa. Its mining operations supply feedstock to downstream manufacturing sites, enabling greater control over product quality, cost and environmental performance. The company serves a diverse customer base of paint and coatings formulators, plastics converters, printing ink manufacturers and other specialty chemical users around the world.

Originally formed through a spin‐off from an energy and chemical company in 2005, Tronox has evolved through strategic acquisitions and organic growth initiatives. A landmark transaction in 2019 brought together Tronox and a major pigment producer to create one of the largest pure‐play TiO₂ companies globally. Headquartered in Stamford, Connecticut, Tronox is led by an experienced executive team with a focus on operational excellence, sustainability and long‐term value creation for customers and stakeholders alike.

Tronox Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Commercial momentum continued, with TiO2 volumes at the high end of guidance and zircon volumes exceeding expectations amid constrained industry supply. Sequential pricing improved 5% for both products, and the company is shifting from temporary surcharges toward more sustainable base-price increases.
• Positive Sentiment: Tronox expects third-quarter adjusted EBITDA of $95 million to $115 million, up from $73 million in the second quarter, driven primarily by pricing, improved operating rates, lower outage-related costs, and ongoing cost savings. The company maintained its expectation for meaningful positive free cash flow in 2026.
• Positive Sentiment: Working-capital execution strengthened liquidity, with inventory reduced by approximately $120 million sequentially and second-quarter free cash flow of $60 million. Liquidity was $527 million at quarter-end, with no significant debt maturities until 2029 and approximately 75% of interest rates fixed through 2028.
• Positive Sentiment: India’s trade-defense agency recommended reinstating duties on Chinese TiO2 imports at previously imposed levels, subject to approval by the Finance Ministry within 90 days. Management believes the measures could support Tronox’s Indian volumes and encourage customers to enter longer-term supply agreements, although benefits may be delayed by existing Chinese inventory.
• Negative Sentiment: Second-quarter adjusted EBITDA fell 22% year over year to $73 million, while the company reported a $171 million net loss that included a $103 million U.S. deferred-tax valuation allowance. Elevated sulfur, energy, diesel, logistics, foreign-exchange, and Middle East-related costs remain risks, and third-quarter zircon volumes are expected to moderate because of limited inventory availability.

Presentation

[Operator]

Good morning, and welcome to the Tronox Holdings Second Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Jennifer Guenther, Chief Sustainability Officer, Head of Investor Relations and External Affairs. Jennifer, please go ahead.

[Jennifer Guenther, Chief Sustainability Officer and Head of Investor Relations and External Affairs at Tronox]

Thank you, and welcome to our Second Quarter 2026 Conference Call and Webcast. Turning to slide two, on our call today are John Romano, Chief Executive Officer, and John Srivisal, Senior Vice President, Chief Financial Officer. We will be using slides as we move through today's call. You can access the presentation on our website at investor.tronox.com. Moving to slide three. A friendly reminder that comments made on this call and the information provided in our presentation and on our website include certain statements that are forward-looking and subject to various risks and uncertainties, including but not limited to the specific factors summarized in our SEC filings. This information represents our best judgment based on what we know today. However, actual results may vary based on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements.

[Jennifer Guenther, Chief Sustainability Officer and Head of Investor Relations and External Affairs at Tronox]

During the conference call, we will refer to certain non-U.S. GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance. Reconciliations to their nearest U.S. GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. Additionally, please note that all financial comparisons made during the call are on a year-over-year basis unless otherwise noted. It is now my pleasure to turn the call over to John Romano. John?

[John Romano, CEO at Tronox]

Thanks, Jennifer, and good morning, everyone. We'll begin this morning on slide four. In the second quarter, we continued to build on the commercial momentum we saw in the first quarter. TiO2 volumes came in at the high end of our guidance and at the highest level since Q2 of 2022. Zircon volumes exceeded our expectations and surpassed the strong levels achieved in Q1 as supply remained constrained across the industry. This performance reflects disciplined commercial execution, strong customer engagement, and the value of our global footprint, which continues to allow us to reliably serve customers as supply dynamics shift across our markets. We also continue to see meaningful structural benefits from anti-dumping measures. In addition, customer shifts in certain markets, including India, where customers are increasingly prioritizing reliable supply and long-term supplier relationships, are driving strong volumes in the region.

[John Romano, CEO at Tronox]

As it relates to India, on August the third, the Indian Trade Defense Agency issued a recommendation that duties on Chinese-made TiO2 be reinstated. The level of the duties recommended is unchanged from the original duties imposed in May 2025. The recommendation now goes to the Minister of Finance, which has 90 days to approve. We believe this represents another important step towards reestablishing a more level and competitive environment. Given the long lead times associated with global shipments, the impact is unlikely to be immediate, but over time, we would expect these measures to impact Chinese exports into India and further support the structural changes already underway in the market.

[John Romano, CEO at Tronox]

We also remain encouraged by the progress of the anti-dumping investigations in Australia and the United Kingdom and will continue to evaluate additional appropriate actions, such as anti-absorption in markets where duties have already been imposed to support fair competition. Additionally, broader supply dynamics continue to evolve. Capacity curtailments, logistics challenges, and trade defense measures are impacting supply and trade flows across a number of regions. On pricing, the previously announced increase took effect as planned during the second quarter, driving sequential pricing improvement of 5% for both TiO2 and zircon. The improvement in Q2 was driven primarily by higher base pricing rather than temporary surcharge mechanisms. We also announced additional pricing actions for both products that have gone into effect in the third quarter.

[John Romano, CEO at Tronox]

While we continue to use targeted surcharges where appropriate, our focus has shifted towards more sustainable pricing actions that reflect the current market conditions, higher input costs, and the value of our reliable supply. We'll discuss our outlook in more detail later in the call, the continued realization of these pricing actions remains an important driver of our expected margin improvement in the third quarter. From a cost perspective, we continue to realize the benefits from our cost improvement program, which remains on track to deliver at the higher end of our $125 million-$175 million run rate target at the end of 2026. These efforts contributed to sales of lower cost inventory during the quarter and helped offset a number of headwinds. As expected, our second quarter cost profile reflected the impact of the planned outages.

[John Romano, CEO at Tronox]

We successfully completed both the regulatory outage in Stallingborough and our extended SR kiln outage. These were significant planned events for the year, and I want to recognize our teams for executing both safely and efficiently. Importantly, those outages are now behind us and position us for improved operating performance moving forward. While we see elevated cost stemming from the conflict in the Middle East and unfavorable foreign exchange movement, we delivered adjusted EBITDA within our expected range for the quarter. We also made strong progress on cash generation and working capital. Free cash flow was a positive in the second quarter, and we reduced inventory by approximately $120 million from the first quarter level, bringing inventory to its lowest level since June 2024. We remain focused on strengthening liquidity, improving working capital efficiency, and continuing to optimize our capital structure to enhance financial flexibility.

[John Romano, CEO at Tronox]

At the same time, we're making targeted operational decisions to support demand and product availability. This includes the restart of a furnace and advancing plans to bring production back online at our west mine, both at Namakwa, to support inventory levels, including zircon to meet demand as we continue to ramp up East OFS to full production. While the situation in the Middle East remains dynamic, our approach remains focused on factors we can control and influence. We are actively evaluating market conditions, customer demand, supply chain impacts, and input costs, and taking targeted commercial and operational actions where appropriate. As conditions evolve, we'll remain disciplined and adaptable, focused on maintaining reliable supply to our customers while protecting earnings and cash flow. I'll speak to our expectations for the third quarter and the full year in more detail later in the call.

[John Romano, CEO at Tronox]

For now, I'll turn the call over to John to review our financials from the second quarter in more detail. John?

[John Srivisal, SVP and CFO at Tronox]

Thank you, John. Turning to slide five. We generated revenue of $868 million, an increase of 19% versus the second quarter of 2025, driven by higher TiO2 and zircon volumes, partly offset by lower average selling prices of zircon, including mix. Loss from operations was $21 million. Net loss attributable to Tronox was $171 million, including a $103 million valuation allowance on certain state-deferred tax assets in the U.S. Adjusted diluted earnings per share was a loss of $0.51. Adjusted EBITDA was $73 million, and our adjusted EBITDA margin was 8.4%. Capital expenditures were $45 million, and free cash flow was a source of $60 million for the quarter. Let's move to the next slide for a review of our commercial performance. As John mentioned, TiO2 volumes came in at the high end of our range, and zircon came in better than expected.

[John Srivisal, SVP and CFO at Tronox]

Pricing for both TiO2 and zircon were in line with our expectations. Sequentially, TiO2 revenues increased 14%, driven by a 9% increase in volumes and a 5% increase in average selling prices, including mix. Volumes came in as expected, driven by stronger demand on the back of the structural shifts that John mentioned earlier. Zircon revenues increased 9% sequentially, driven by a 4% increase in volumes and a 5% increase in average selling prices, including mix. Volume remained strong, following a solid first quarter, reflecting continued customer realignment in a capacity-constrained environment. Zircon pricing reflected increases that were announced in the first quarter and took effect in the second quarter, as we referenced on our last earnings call. Revenue from other products decreased 7% compared to the prior year, which represented a 29% increase sequentially, driven by pig iron volumes.

[John Srivisal, SVP and CFO at Tronox]

Turning to the next slide, I will now review our operating performance for the quarter. Our adjusted EBITDA of $73 million represented a 22% decline year-on-year as a result of exchange rate headwinds, unfavorable pricing including mix, and higher production costs, freight, and other expenses. This is partially offset by the increase in sales volume that I had discussed on the previous slide. The year-over-year production cost increase of $10 million included the impact of the planned regulatory-driven outages, as well as the continued effect of actions taken over the last year to enhance cash generation by slowing select mining operating rates. Partially offsetting these impacts were sales of lower cost inventory and savings associated with our cost improvement program and plant closures. Sequentially, adjusted EBITDA increased 18%.

[John Srivisal, SVP and CFO at Tronox]

Favorable pricing, including mix and higher sales volume, were partially offset by higher production costs, exchange rate headwinds, and higher freight and other costs. Turning to the next slide. We ended the quarter with total debt of $3.2 billion and net debt of $3 billion. Our weighted average interest rate in Q2 was approximately 6%, and we maintained swaps as debt. Approximately 75% of our interest rates are fixed through 2028. Importantly, our next significant debt maturity is not until 2029. We do not have any financial covenants on our term loans or bonds. Liquidity as of June 30th was $527 million, including $194 million in cash and cash equivalents. Over the last year, we've demonstrated the numerous levers at our disposal to proactively manage our balance sheet and enhance our liquidity position.

[John Srivisal, SVP and CFO at Tronox]

Towards that end, in the second quarter, we replaced the expired short-term Emirates revolver with a new $75 million long-term financing arrangement that provides us with greater financial flexibility. Working capital was a source of approximately $101 million in the second quarter, excluding $10 million of restructuring payments. This was driven by better-than-planned inventory reductions from targeted working capital initiatives, partially offset by higher AR and lower AP. Capital expenditures of $45 million in the quarter were primarily related to maintenance and safety, and we returned $8 million to shareholders in the form of dividends during the quarter. With that, I'll hand it back to John to review our capital allocation priorities. John?

[John Romano, CEO at Tronox]

Thank you, John. Turning to slide nine. Our capital allocation priorities remain unchanged. We continue investing to maintain our assets, preserve our vertical integration advantage, and advance projects that support our long-term strategy, including rare earths. As earning and cash generation recover, we'll resume debt paydown, targeting a long-term net leverage of less than three times. With that, I'd like to turn to our outlook and walk through some of the assumptions that will drive our performance in the third quarter. Turning to slide 10. Following a strong first half of the year, we expect TiO2 volumes to be down moderately in the third quarter in the mid-single-digit percentage range, consistent with normal seasonal patterns.

[John Romano, CEO at Tronox]

We expect zircon volumes to moderate slightly following a very strong first half, primarily due to inventory availability. On pricing for both TiO2 and zircon, the announced increases during the second quarter have taken effect and are positively impacting our margins in the third quarter. As a result, we expect TiO2 pricing to increase sequentially in the mid-single-digit percentage range and zircon pricing to increase in the mid to high single-digit percentage range. It's worth noting that we are transitioning away from some of the temporary surcharge mechanisms and focusing more on base price improvements. We continue to utilize targeted surcharges where appropriate, now largely limited to sulfur-related costs in Brazil and Thann. From an operational perspective, the plan and extended outage activity that impacted the second quarter is now behind us.

[John Romano, CEO at Tronox]

In the third quarter, we anticipate improved performance driven by higher operating rates and the continued sale of lower-cost inventory. These benefits are expected to be partially offset by an elevated sulfuric acid, diesel, utilities, and other inputs such as tungsten, resulting from the ongoing volatility in the Middle East. We remain focused on recovering these higher costs through pricing and other commercial initiatives over time. As a result, we expect third quarter adjusted EBITDA to be in the range of $95 million-$115 million and expect margins to improve sequentially in the third quarter. We expect free cash flow to be relatively neutral in the third quarter as it includes the semiannual interest payments. We made significant progress on pricing, inventory reduction, and liquidity during the first half, ensuring a position of strength as we move into the second half.

[John Romano, CEO at Tronox]

Based on our outlook today, we continue to expect meaningful positive free cash flow for the full year 2026. Incorporated into our guide are the following assumptions on cash for the year: net cash interest of approximately $190 million, net cash taxes of less than $10 million, capital expenditures of less than $260 million, and we expect working capital to be a source of cash well in excess of $100 million. Turning to slide 11. As we discussed throughout the call, the operating environment continues to evolve, particularly as the ongoing conflict in the Middle East impacts supply chains, trade flows, and input costs. Against that backdrop, we've taken deliberate actions within our control to strengthen the business and position ourselves for the opportunities ahead. Commercially, we continue to execute on pricing, maintaining disciplined customer engagement, and leverage the strength of our global footprint and reliable supply position.

[John Romano, CEO at Tronox]

Trade defense remains an important component of our strategy. We continue to see the benefits of measures already in place and remain focused on supporting a fair and competitive market environment. We also continue to closely monitor global trade flows and support additional actions where appropriate. Operationally, our focus remains on strengthening the advantage of a vertically integrated business model, improving our cost profile, and enhancing operational efficiencies. We continue to evaluate production plans across our asset base to ensure we're balancing customer demand, inventory levels, cash generation, and operating efficiency. As a result, we're beginning to see an improvement in a number of factors that weighed on earnings during the first half. Operating rates are improving, utilization levels are increasing, and the impact of unfavorable absorption should continue to moderate as we move through the balance of the year. That said, not every factor is within our control.

[John Romano, CEO at Tronox]

Input and logistics costs remain elevated, broader inflationary pressures persist, and economic conditions remain volatile. We cannot control the macro environment, but we can control how we run the business. The actions we've taken over the last several quarters have strengthened our cost structure, improved our financial flexibility, and enhanced the long-term earnings potential of the business. As pricing actions continue to build, operating rates improve, and the benefits of our vertically integrated business model become more pronounced, we believe Tronox is increasingly well-positioned to capitalize on the structural changes taking place across our markets. Combined with the improving market conditions over time, those factors have the potential to drive a meaningful step change in earnings and free cash flow. Turning to slide 12. I'd like to touch on our rare earth initiative before we turn the call over to questions.

[John Romano, CEO at Tronox]

We continue to advance our rare earth strategy while remaining prudent around capital. We're engaging broadly with stakeholders, including potential customers, strategic partners, and funding sources to identify the most viable and responsible way forward for the project. The definitive feasibility study for the cracking and leaching facility in Australia to produce mixed rare earth carbonate, or MREC, is expected to conclude in the third quarter of 2027. The expected capacity of that facility is 10,000 tons per year on a total rare earth oxide basis, with a startup expected in late 2029, assuming we continue on the current trajectory. Simultaneously, we continue to evaluate the potential to move further downstream to the build-out of a rare earth refinery to produce separated rare earth oxides from the MREC produced in Australia.

[John Romano, CEO at Tronox]

We are currently scoping possible sites, including our Hamilton, Mississippi site, which is highly advantaged for rare earth refining due to low-cost power and reagents used in solvent extraction. These ongoing discussions are instrumental in shaping our approach and ensuring that we pursue opportunities that align both with our strategic vision and our values. Our approach remains steadfast in its dedication to generating long-term shareholder value. We are carefully balancing strategic opportunities with prudent financial management. We believe that rare earths represents a compelling growth platform for Tronox, leveraging our vertical integration, our existing mining footprint, and our expertise in hydrometallurgical and chemical operations to create new avenues for sustainable growth. That will conclude our prepared remarks. We'll now turn the call back over to the operator for Q&A. Operator?

[Operator]

As a reminder, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Begleiter with Deutsche Bank. Please go ahead.

[David Begleiter, Director at Deutsche Bank]

Thank you. Good morning. John, just on your potential U.S. rare earth refinery, would you pursue without U.S. government pricing support? Do you still think you need a technology and/or financial partner for that potential refinery? Thank you.

[John Romano, CEO at Tronox]

Yeah, thanks. Look, I guess two things. One, we're looking at this in phases. The first phase is the MREC plant in Australia. The second phase would be to go to a separated oxide facility and possibly in Hamilton, Mississippi. We're still looking at all possible avenues for financing. From the MREC facility, we don't need a technology partner, but ultimately for going to separated oxides, we're still exploring what that right avenue would be and if in fact we needed a strategic partner. We're still making progress. The first phase of our approach, although simultaneously we're looking at what we might do with a separated oxide facility in Hamilton, where our primary focus right now is getting that definitive feasibility study done for the MREC plant in Australia.

[David Begleiter, Director at Deutsche Bank]

Very good. Just on India, are these reinstated tariffs potentially high enough to preclude all Chinese imports? Can you remind us what those imports have been the last few years into India?

[John Romano, CEO at Tronox]

I wouldn't expect that all the exports are going to go away. The reality is, China's going to be a competitor of ours for a long period of time, and we have to be competitive with them. These trade measures are a bridge for us to continue to improve our cost profile and be able to compete fairly. That being said, we do think that the duties that have been announced and were stayed, and now there's been a motion by the Trade Defense Agency in India to reinstate those. Those numbers range from on the low end of $460 to the high end of $681. We believe that those are going to be enough to help us manage that business in a better way. When you think about our volumes in India, even though those duties have been stayed, our volumes are still growing in India.

[John Romano, CEO at Tronox]

Even though the exports from China into India in the last month were higher, our volumes from Q1 to Q2 continued to increase.

[David Begleiter, Director at Deutsche Bank]

Thank you.

[Operator]

Your next question comes from the line of Josh Spector with UBS. Please go ahead.

[Josh Spector, Managing Director of NA Chemicals and Packaging Research at UBS]

Yeah. Hi, good morning. I wanted to ask just on your comments around the surcharge to structural pricing kind of transition here. How much pricing in 2Q would you say was from surcharges, and what's kind of left within the mix today?

[John Romano, CEO at Tronox]

Yeah. Thanks for your question, Josh. What's left in the mix today is a small portion that's largely tied to sulfur. Again, the majority of it's tied to sulfur. There's still a few that are lagging out there. In the second quarter, I think we had some color on that in the first call, was about 60%-70% of the price that we increased in the first quarter was strictly pricing, and the balance was surcharges. When you think about that transition into Q3 where we're still talking mid-single digit price increases, we converted some of what was surcharges into longer term pricing because that longer term pricing is stickier than surcharges.

[Josh Spector, Managing Director of NA Chemicals and Packaging Research at UBS]

Okay. No, that makes sense. If I could ask more broadly just about kind of the industry from here. It's nice to see Western players starting to get more price. I guess, when we look around, some of the industry was tight because of Western outages from some of your competitors that are now ramping up supply. There's potentially more supply in Europe. China supply seems like it's just not going away from the export market for whatever reason. I guess, if we don't have a good coating season next year, does this create a headwind that means that it's going to be harder to keep price and potentially get back price? If not, why do you think that would trend the other way?

[John Romano, CEO at Tronox]

Yeah. Look, it's a great question. What I can say is that the market will recover, but I can't be specific on when it is going to recover. I think the important part is what we're seeing right now is all on the back of what you just described, which is a structural shift in the supply base. When pricing was moving down over the course of the last several years, what you saw was customers weren't really buying much inventory because there was always an assumption that price might be lower in the next quarter or the next month.

[John Romano, CEO at Tronox]

As pricing starts to move up, what we saw is that customers started to rebuild some inventory, and very quickly, we got to the point where we talked a little bit about having constraints around what we can even take on the order pattern because we're selling everything that we're making now. We drew down inventory. What that says is that any kind of a flex on demand, whether it's structural or true demand drivers, the industry's having a tough time even with China filling that on a short-term basis because you have to remember, even with the capacity coming back in Spain, the capacity coming back in Italy, and the announcement that Lohmann is starting their facility in the U.K. in August, and they'll start to ramp that up. To be clear, we don't know any more than what's been reported.

[John Romano, CEO at Tronox]

There's still more than a million tons of capacity that's come offline net. That's why I still think what's happening right now, not on the back of demand, there's more upside when the market does recover. I can't say there won't be any downside on pricing, but right now, we're in a comfortable place, and we think we're on the right trajectory with two quarters of price improvement under our belt, in a market that has not been supported by demand improvement.

[Josh Spector, Managing Director of NA Chemicals and Packaging Research at UBS]

Great. Thank you.

[Operator]

Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Duffy Fischer with Goldman Sachs. Please go ahead.

[Duffy Fischer, Equity Research Analyst for US Chemicals at Goldman Sachs]

Yes. Good morning, guys. First question is just on the midpoint of your guide, you're up sequentially about $32 million in EBITDA. Could you do just kind of a quick bridge like you did on slide seven? How much of that $32 million improvement comes from price? Obviously, volume probably is a little bit of a negative because you called that as down. Then how much is getting better on cost?

[John Srivisal, SVP and CFO at Tronox]

Yeah. Thanks, Duffy. We don't want to give specific numbers there. Obviously, we've given a guide around what we expect high level of volumes and pricing to drive. Pricing is driving the majority of the improvement quarter-over-quarter. We are seeing declines. It's more seasonal related on TiO2 and zircon. We're also seeing a benefit on the cost. If you recall, we did have couple of significant outages in Q2 that will be added back to Q3, as well as better costs from our sustainable cost improvement program, as well as shutdowns of our Botlek and Fuzhou facilities. We are seeing that net be a slight benefit. However, obviously there's a lot going on with the war that we can't control. We're seeing costs escalate. We're going to try to cover as much as we can, but that potentially could be a headwind.

[John Srivisal, SVP and CFO at Tronox]

As you've already seen on the Q1 and Q2 year-over-year graphs, bridges that we provided, FX is a huge headwind year-over-year. We're needing to overcome that. Again, the biggest item driving our earnings improvement is pricing.

[Duffy Fischer, Equity Research Analyst for US Chemicals at Goldman Sachs]

Thank you. Then, just a clarification. The comment you guys were making around zircon, where inventory is going to limit sales in Q3, is that because you've drawn down your inventory so you don't have as much excess inventory to sell above production? Or that's inventory at your customer level where they've kind of built back some inventory and maybe their demand pull isn't as strong?

[John Romano, CEO at Tronox]

No, that's our inventory and our ability to meet that, and it's really more towards the end of the quarter, so there could be some volume slipping out as far as rolling. We have pulled back our inventory significantly with the last three quarters of high sales. That's our inventory being lower. Again, it's not so much having it, but having it at the right time and making sure we get those shipments out. That's why we made that comment moderating it slightly due to inventory.

[John Srivisal, SVP and CFO at Tronox]

That's the reason why we are bringing the West Mine up, because that will give us a significant amount of zircon inventory later in the year.

[Duffy Fischer, Equity Research Analyst for US Chemicals at Goldman Sachs]

Terrific. Thank you, guys.

[Operator]

Your next question comes from the line of Jeff Zekauskas with JPMorgan. Please go ahead.

[Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan]

Thanks very much. I think Chinese imports into Europe year to date are up 25%. There are obviously high tariffs in Europe. What do you make of the increase in Chinese imports, if you see it the same way?

[John Romano, CEO at Tronox]

Jeff, look, again, we get the question on the Chinese imports a lot, they were up. When you think about a lot of those exports, it was a big increase in India. There was also a significant increase in chloride exports, which I'd say wasn't abnormal for the last couple of months, but it's just noteworthy. I think that's coming from the fact that sulfur prices have gone up so much that some of the chloride producers over there. If you think about nameplate or actual production that we're forecasting out of China in 2026 is about just under 5 million tons. About just under 1 million of that is chloride. They're starting to export some of that material. China's not very strong right now. We still sell in China.

[John Romano, CEO at Tronox]

China's a weak market, even though we don't have an asset there any longer. There's an element of continuing to push exports out because the market in China is weak. You've also got the issue where we've got it on pretty good authority that there are a number of producers over there that are curtailing production. They've got inventory, but they need to generate cash. I can't be specific as to exactly why they're doing it, but exports are up. The big swing was in India. I'll restate what I made earlier. Even though their exports were up, there was some repositioning in India where some suppliers aren't supplying as much there. Our volumes from Q1 to Q2 went up in India as well.

[John Romano, CEO at Tronox]

I think there could be also one last element of, I made reference that the trade agency in India has now recommended the duties come back online. There was an assumption that that could happen. Those duties won't be retroactive, there could be some movement of inventory over into China, I mean, into India, knowing that those duties are going to come back. They're building a bit of inventory over there, and that's why I made the comment that it could take some time before we see that benefit, because there's going to be some inventory build in India from some of those Chinese exports.

[John Srivisal, SVP and CFO at Tronox]

I will say as well, we have seen chloride volumes go up pretty significantly. It's almost doubled in the EU. You have to keep in mind, as you know, the majority of the Chinese producers are sulfate, you will be more capped on the exports from China on chloride. Obviously, they're exporting chloride because sulfur price has gone up significantly, it is more economical for them on a chloride basis.

[Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan]

Then maybe a financial question. Two parts. Your gross profits are down year-over-year in the quarter and for the six months. Should we read that as whatever the price and volume increases have been, they've not been large enough to outstrip your cost inflation? Is that a fair appraisal? I would second, do you expect your inventories at the end of the year to be lower than they are today? Maybe if you can tell us how you've brought down your inventories.

[John Srivisal, SVP and CFO at Tronox]

Sure. No, good questions there.

[Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan]

Sure. Thank you.

[John Srivisal, SVP and CFO at Tronox]

I would say on your first question, from a gross margin perspective, obviously costs have been inflated significantly year-over-year. In particular, following the war, prices have skyrocketed in sulfur, which we do consume some of it, as well as some other costs. I think you need to keep in mind that we had two major outages in Q2. All that cost with no production does go and expensed in that quarter, versus if you had some production above a certain level, you would spread it out, it would go to inventory. I think that's part of what's missing. We have seen pricing increasing and provide more gap versus cost increases generally in the first half of the year.

[John Romano, CEO at Tronox]

Just maybe on those two outages, remember, the outage on the SR kiln was north of 50 days. The Stallingborough outage was scheduled for 24 and it went to 29. All of the costs that we had that could have been into a small amount of inventory based on Stallingborough, we absorbed all those in the month of June. That's why we're going to have better costs going into the third quarter. We took that hit in the form of an idle facility charge in the third quarter in the month of June. I mean, second quarter in the month of June.

[John Srivisal, SVP and CFO at Tronox]

On your second, on inventory, obviously, you've seen Q2. We took a big change in our operating method to purposely slow down our production in order to unlock cash through inventory. You saw $120 million roughly of cash being released from inventory. This was primarily finished goods. Primarily pigment and zircon, to a lesser extent, feedstock. We look towards the rest of the year, we've mentioned, we are ramping up our facilities, running the pigment plants unconstrained. John mentioned we do have more orders than we've been able to fill. We will ramp up those facilities that we will be able to sell them, we believe. We do still see inventory lowering in the second half of the year. It's just not going to be the extent of what we brought down in Q1 and Q2.

[John Srivisal, SVP and CFO at Tronox]

If you want to finish the working capital side of it, we do see, obviously, more cash generating in Q3 and Q4 from AR. As I says, we expect volumes to be down a bit, we do expect to collect more on the AR.

[John Romano, CEO at Tronox]

In that range of EBITDA that we talked about, in the third quarter, we're still expecting to draw more finished goods inventory down because we've got more sales than we're producing. In the fourth quarter, again, you're going to see a seasonal shift. Typically we would build some inventory in the fourth quarter. That will largely be TiO2 inventory. We don't believe we'll build any zircon inventory.

[Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan]

Maybe if I can squeeze in a last one. Why should your free cash flow in the fourth quarter be much better than the other quarters? What's going on in the fourth quarter? What are the levers?

[John Srivisal, SVP and CFO at Tronox]

I mean, the biggest driver is what I mentioned, it's working capital, primarily AR. As you know, it's seasonally down, you should collect from that. Secondly, if you look at, for example, our profile quarterly, we have two big interest payments in first quarter and second quarter, each $50 million. You have to add that back to Q4. That gives us confidence that we're going to generate significant amount of free cash flow in Q4.

[Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan]

Okay, great. Thank you very much.

[John Romano, CEO at Tronox]

Yep. Thank you.

[Operator]

Your next question comes from the line of Hassan Ahmed with Alembic Global Advisors. Please go ahead.

[Hassan Ahmed, Co-founder, Partner, and Head of Research at Alembic Global Advisors]

Morning, John. John, a question around cost curves. Obviously, sulfur availability remains an issue. Sulfuric acid prices have gone up a fair bit, and obviously China is curbing the exports of sulfuric acid as well. I mean, as you look at the cost curves, what % of the industry do you think is in the red right now? Part and parcel with that, I mean, historically over the last couple of quarters, you guys would give an update on the rationalization side of things. Where do we stand on that front as well?

[John Romano, CEO at Tronox]

Thanks, Hassan. Look, it's really hard to get a super accurate read on exactly what's going on in China, but I'll give you anecdotally what we've heard recently, is there are as many as 19-20 producers in China that are curtailing for the very reason that you just identified. Sulfur prices, I think on our last call, we were talking about pricing being up 300%. Sulfur prices are up 400% now. On a sulfur basis, that's like a one-to-one. As sulfur goes up, you got to raise the price for TiO2 accordingly. We've also made that correlation to sulfuric acid. As it goes up $100, you have to raise the price $300. Pricing has started to move. You've got this dynamic where we talked a little about China's increase in exports of chloride versus sulfate.

[John Romano, CEO at Tronox]

Pricing for chloride TiO2 hasn't gone up as much as the costs have gone up for sulfur. I guess short answer, I would say the majority of producers are now not able to pass through all the sulfur charges. Again, we're using surcharges for sulfur both in Thann and Brazil, but there's a limit to what we can do to make sure we continue to maintain competitive activity, and we maintain our share. I would say the majority of them are, and one of the reasons are losing money. One of the reasons exports are still increasing, and again, it's hard for me to gauge that month-to-month. One is I think there is a belief or an understanding that duties are going to come back in India, so that's why you saw that channel get filled up a bit.

[John Romano, CEO at Tronox]

There were exports increased in a lot of other countries, and I think the Chinese are continuing to push volumes out because they need to generate cash. It's not so much for making money.

[Hassan Ahmed, Co-founder, Partner, and Head of Research at Alembic Global Advisors]

Fair enough. One of the points that you raised, which I think is kind of interesting, now that there's more clarity around the anti-dumping measures in India in particular. Obviously, I think there was some concern around elevated exports coming out of China. Do you really think that ahead of potentially these anti-dumping measures, the Chinese may have elevated their exports to India in particular? Could that be an opportunity for you, call it post the 90-day period that you guys talk about, of garnering more market share out in India in particular?

[John Romano, CEO at Tronox]

I agree with that 100%. One of the reasons they're doing it is because although they have said they're going to reinstate the duties, there isn't going to be any retroactive duty on that. The issue is there's not a lot of opportunity for them to store material over in India based on those Chinese companies don't have a lot of wholly owned subsidiaries over there. I do think there is a bit of customers buying more of the Chinese on the assumption that those duties are going to go away. I would agree with both your timing and the definition of how you describe what the Chinese are doing at this particular stage on the assumption that those duties are coming back.

[Hassan Ahmed, Co-founder, Partner, and Head of Research at Alembic Global Advisors]

Very helpful, John. Thank you so much.

[John Romano, CEO at Tronox]

Thank you.

[Operator]

Your next question comes from the line of John Roberts with Mizuho. Please go ahead.

[John Roberts, Managing Director at Mizuho]

Thank you. You mentioned LB planning to ramp in the U.K. here. Is your understanding that that will only be finishing, or do you think they're attempting to refire the furnaces? Do you expect that product to make its way to the EU as well?

[John Romano, CEO at Tronox]

I can only tell you what I've read, which is public, is that they're talking about starting up one chlorinator. When you think about that facility, they've got multiple chlorinators. One of them apparently is in a position where they're going to restart it. They've got one oxidation line. They're going to be running that asset. They've talked about recommissioning and starting in August. We'll have to wait and see what that is. It's at a very low rate of production run. They've only got one oxidation line, so you're going to be putting very little titanium tetrachloride through that oxidation line. It doesn't feel to me like it's going to run super efficiently. That's if in fact they do. I don't have any more information than what's public right now, and as we get more information and can share it, we will.

[John Romano, CEO at Tronox]

With regards to if they produce it in the U.K., they could sell it into Europe. I can't tell you if they're going to be bringing raw pigment in and trying to finish it there. That wouldn't be in alignment with the trade barriers that are put in place. I'm not going to speculate on what they're doing, and we'll continue to evaluate that as we monitor trade flows. To the extent we can provide an update before they update you, we will.

[John Srivisal, SVP and CFO at Tronox]

Just a reminder, that facility was high cost, which obviously why it got shut down. Obviously, running that without all the lines up would imply that the cost would be even higher.

[John Romano, CEO at Tronox]

If you go back to the points we made back when we were slowing our production down, one thing that we found is that one oxidation line facilities running below 70% capacity don't run very well.

[John Roberts, Managing Director at Mizuho]

Got it. On rare earths, what would be the gross capital requirements for phase I and then phase II?

[John Romano, CEO at Tronox]

Look, at this particular stage, we haven't provided a lot of color on exactly how much capital. We are looking at the definitive feasibility study on what that separation and cracking facility will look like. That'll be done, like I mentioned on the prepared comments, in the third quarter of 2027. Although we've got some ideas, a lot of that is going to depend on the feed rate, who we're working with, because again, it's just a little bit too early to be giving you actual capital numbers. Fact of the matter is, it's public that both EFA and Ex-Im Bank have given us a non-binding indication of up to $600 million, we're looking at lots of funding sources at this stage.

[John Roberts, Managing Director at Mizuho]

Great. Thank you.

[Operator]

Your next question comes from the line of Frank Mitsch with Fermium Research. Please go ahead.

[Frank Mitsch, President at Fermium Research]

Thank you. I want to come back to India. Obviously, you mentioned how the Directorate General of Trade Remedies has recommended putting the duties back on, the Ministry of Finance has 90 days to act on that. What are your government affairs people saying about the history of the Ministry of Finance accepting these recommendations? I mean, is it a rubber stamp? Do they go along with it 50% of the time? I mean, any color here, because this is really the first time that we're dealing with this situation. Any help there in terms of the probabilities of this being accepted by the Ministry of Finance would be very helpful.

[John Romano, CEO at Tronox]

Great question, Frank. Look, considering these went into effect in May, and here we are in August of 2026, and we're still kind of working through what those ultimate duties are going to be. They do have 90 days to approve it. I would expect that there's going to be some complaints from the Indian Paint Association on that. I do think that that recommendation is, in fact, I won't call it a rubber stamp, but they've got 90 days to approve that, and there'll be some back and forth around what that is. I think at this particular stage, we feel pretty confident, and we're very engaged in India. I'll be there in two months, not to meet with them, but we, I mean, two weeks. We're spending a lot of time over there. It is a very important market for us.

[John Romano, CEO at Tronox]

Our margins and our volumes have continued to grow in that area, and we have a very vested interest in trying to make sure that there's fair trade over there, because it's a significant market for us. It's hard for me to give you a definitive answer, but I'll say I'm a bit more confident that this decision was made, and there's a 90-day window, and hopefully, that answer will come sooner than that.

[Frank Mitsch, President at Fermium Research]

Well, you mentioned that the Indian Paint Association will lobby the Ministry of Finance to try not to have these duties put on. I would assume that they have been lobbying pretty hard the Indian Trade Defense Agency. Has that not been the case?

[John Romano, CEO at Tronox]

It has. Again, it's not saying they won't continue to do it. I guess the reason I said that is I don't have a real clear, definitive answer on exactly when it's going to happen. There's 90 days there, and I'm sure they're going to continue to lobby. To your point, they did lobby against it, and the trading authorities agreed that they were going to reinstate them. That's just a 90-day period that they've got to continue to evaluate it.

[Frank Mitsch, President at Fermium Research]

Okay. Yeah.

[John Romano, CEO at Tronox]

It's a bit opaque, to use a TiO2 word, but hopefully it will be done prior to 90 days.

[Frank Mitsch, President at Fermium Research]

Okay. The way that realistically, if it gets implemented, et cetera, the Chinese are going to be building inventory for the next couple of months over there. It'll take time for the Indian paint companies to work through that inventory. We're really talking about a benefit in 2027, realistically, potentially.

[John Romano, CEO at Tronox]

I would say maybe for additional volume, that's true. It depends on how much they export between now and the end of the quarter. The numbers that they exported in the month of June were really high. That's why I'm kind of leaning towards this idea that they're building some inventory on there on the assumption that they're going to go down. I'll make the point. Our volumes in Q1 were higher than they were in Q4. Our volumes in Q2 are higher than they were in Q1. We're continuing to align with customers over there that are looking for strategic partners, knowing that some of these things are going to happen. Our volumes have not gone down. Our volumes Q1 to Q2 have actually increased in India, and we don't expect that we're going to lose share over there right now.

[Frank Mitsch, President at Fermium Research]

Thanks so much, John.

[John Romano, CEO at Tronox]

Thank you.

[Operator]

Your next question comes from the line of John McNulty with BMO Capital Markets. Please go ahead.

[John McNulty, Managing Director and Chemicals Analyst at BMO Capital Markets]

Yeah, thanks for taking my question. Maybe somewhat tied to your last answer. I think, John, earlier, I guess at the beginning of the presentation, you spoke to how there were customers that were looking for stability around long-term supply, and you were looking to capitalize on that. I guess, can you speak to the levers you can pull that kind of lock in some of that longer-term volume so that it doesn't just become temporary and kind of tied to sulfur pricing and what's going on in the Strait right now?

[John Romano, CEO at Tronox]

I was speaking more specifically to India on that one. Again, not knowing what China's going to do, and I think this all comes back down to the anti-dumping duties. We believe, and I think some of our customers believe, ultimately, they're going to be put in place. We see customers shifting towards longer-term commitments, and that's helped us secure volume for longer periods of time, where typically, we'd be negotiating quarterly. We're getting agreements for longer periods of time because they value us as a supplier, having reliable supply and knowing that we're going to be predictable long term, and not in and out of the market. I think the fact of the matter is China moves in and out of the market. We've been in that market. It's the second-largest market that we sell into globally, or second-largest country we sell into globally.

[John Romano, CEO at Tronox]

It's strategic for us. I think you could say that for lots of regions that are impacted by duties. The fact of the matter is there's duties in Brazil, there's duties in Saudi Arabia, there's duties in Europe. We believe duties in India are going to come back. We're actively working on duties in Australia. We're actively working on duties in the U.K. The only other place that TiO2 is produced is Canada and Mexico. You've got a lot of free trade of efforts in place. I can't tell you where things are in Canada and in Mexico at this stage because they don't produce there.

[John McNulty, Managing Director and Chemicals Analyst at BMO Capital Markets]

Got it. Okay. No, that's fair. Makes sense. Then I guess the only other question I had was, you mentioned early on a lot of anti-dumping measures have been taken and the next step in your mind is some anti or at least potential anti-absorption steps. I guess, can you help us to think about how that process starts and where you might be able to take that, or the industry in various regions might be able to take that over time?

[John Romano, CEO at Tronox]

What I can tell you now is that we're looking at that in areas where duties have already been implemented. I can't get into specifics, but anti-absorption basically means companies that continue to absorb the duties and don't move the price accordingly. We're actively involved in looking at those in areas where duties are already in place. At this particular stage, I can't provide you any more color on what we're doing. Let's just say that there's a significant body of work that's going on around maintaining and optimizing fair trade.

[John McNulty, Managing Director and Chemicals Analyst at BMO Capital Markets]

Okay. Fair enough. Thanks very much for the color.

[John Romano, CEO at Tronox]

Thank you.

[Operator]

Your next question comes from the line of Ed Brucker with Barclays. Please go ahead.

[Ed Brucker, VP and High Yield Credit Research Analyst at Barclays]

Hey, thanks for the call this morning. My first question, it seems like volumes were pretty strong to start the year. Would you attribute any of that to some pre-buying maybe ahead of potential price increases other customers were expecting or even uncertainty within the market? Do you think that could potentially lead to destocking to end the year?

[John Romano, CEO at Tronox]

That's a great question. I do believe as pricing starts to move up in any cycle, whether that's driven by structural supply shifts or demand, as pricing starts to move up. When pricing's moving down, people draw inventories down. As it starts to move up, there's an assumption that it's going to continue to move up, so people do start buying. There was a little bit of that in the first quarter. What's going to prevent that from happening in the second and third quarter is that, I won't speak for the entire industry, but our inventory very quickly got depleted. As we mentioned, we drew down north of $100 million of inventory from Q1 to Q2. I would believe our competitors are in similar position, so there's not a lot of opportunity for a lot of inventory to be built.

[John Romano, CEO at Tronox]

I'll go back to the industry doesn't have the same capability to flex production because there's 1 million less tons of production out there to respond to that demand. Can't say that it won't happen. I'd say there's limited capability for a lot of pre-buying going on in the markets that we serve, other than what I talked about in India and some of the markets where anti-dumping may be coming back.

[Ed Brucker, VP and High Yield Credit Research Analyst at Barclays]

Got it. Thanks. My next one, I noticed on the slide deck that you expect current CapEx levels to be around the next couple of years, CapEx levels to be around 2026 levels. How should we view that in the context of any sort of growth CapEx? Are we staying close to maintenance, and would you view that as kind of an under-investment over time over the next couple of years?

[John Srivisal, SVP and CFO at Tronox]

Yeah. Less than $260 million is our guide for this year. Historically, it's been operating at much higher levels just due to a lot of the mining investments that we've done. As we've mentioned previously, those are mostly behind us. Expect to be at these levels the next five to eight years. I'll say within that bucket, we do still have some discretionary and growth capital in there. Maintenance and safety is usually around $150 million-$175 million, roughly, up and down here and there throughout the years. We do have a significant amount that we would describe as discretionary. It does exclude, however, anything related to the rare earth project at this point in time, other than some normal expenses that we're incurring for the DFS and just setting up that business.

[Ed Brucker, VP and High Yield Credit Research Analyst at Barclays]

Thanks for the time.

[John Srivisal, SVP and CFO at Tronox]

Sure.

[Operator]

Your next question comes from the line of Peter Osterland with Truist. Please go ahead.

[Peter Osterland, Equity Research Analyst at Truist]

Hey, good morning. Thanks for taking the questions. First, just wanted to follow up on the earlier point on how you've been managing operating rates across your TiO2 footprint. Could you approximate how much your average utilization rates changed as of mid-year versus where you were at the end of last year, and where are you planning to go in the second half?

[John Srivisal, SVP and CFO at Tronox]

We have actually obviously at the first half of the year, we did bring down our operating rates just to unlock more inventory. As we've seen a big pickup in our sales volumes, we are not constraining any of our assets. The only one that we have more potential would be in Bunbury, where we have one line that has the potential to go online later this year.

[John Romano, CEO at Tronox]

Actually, we're in a process of rebuilding that line. It's a line that's been down. Remember that facility has six oxidation lines, six chlorination lines. To the extent we need to bring that back up, it'll be ready to be brought back up. At this particular stage we're running unconstrained at our TiO2 facilities. Other than that.

[Peter Osterland, Equity Research Analyst at Truist]

Great. Very helpful. Thank you. Then, just as a follow-up, looking into the fourth quarter, I understand there's some negative seasonality around TiO2 volumes there, but just given the dynamics around costs and pricing that you described, would you expect your margins in the fourth quarter to be your highest for the year and potentially even meaningfully step up from third quarter? Thank you.

[John Srivisal, SVP and CFO at Tronox]

Obviously, we haven't guided for Q4, obviously the pricing momentum that we've had will create some tailwinds for us.

[Operator]

Your next question comes from the line of Aaron Rosenthal with JPMorgan. Please go ahead.

[Aaron Rosenthal, Executive Director of Credit Research at JPMorgan]

Hey, good morning, and thanks for your time. Just circling back to the decision to re-ramp the assets. I guess, what gives you confidence in there being incremental market demand for zircon in 2027? Is it a specific call on, let's say, China housing recovery? Are you seeing any indications of the competitors that are maybe idled today not having an ability to re-ramp as well? Just trying to think about balancing the earnings uplift potential against the potential liquidity needs in the working capital front.

[John Romano, CEO at Tronox]

Yeah, look, great question. I'll just make the comment that we need that for the inventory. Right now, we will be selling more than we're producing in 2026 and drawing down that inventory. Starting that line up is going to allow us to continue running at the rates that we need to run at to meet customer demand. I don't expect at this stage, based on what we know, there's going to be a significant change in our demand for that product. Specifically, there's a lot of things going on. When you think about it, there have been some capacity constraints out there, which I think from the individual producers you know. In Indonesia, largely there's a lot of that production that's not there, or that's not being produced at this particular time. That's about 65,000-70,000 tons per year.

[John Romano, CEO at Tronox]

Then I think more importantly, in China, there's a lot of heavy mineral concentrate that gets converted to natural rutile, monazite, and zircon. At this particular stage, it's not very economic for them to convert that for two reasons. One, there's not a home for the ilmenite because volumes in China are down and there's no home for the ilmenite. The zircon that they're producing is not a premium grade there. In China, the ceramics industry is not doing well, where you're getting the big pull from a demand perspective. We didn't talk about this on the last call, but China's improving a little bit, but it's more driven towards investment casting, zirconium chemicals, fused zirconia, and refractory applications, not ceramics. The majority of our sales in China, Tronox's, actually migrate to those other products.

[John Romano, CEO at Tronox]

Only 16% of our sales in China go to ceramics, and globally that's only 8%. I hope that answers the question maybe a bit longer than you wanted, but this is to meet current demand, bringing on the West mine, and it's also while we're ramping up East OFS to full capacity. We would expect that that'll help us support sales into the end of the year and into 2027.

[Aaron Rosenthal, Executive Director of Credit Research at JPMorgan]

That's great. Yeah. More detail, I think is always very much appreciated. Then maybe one more on India. I know there's been a lot of Q&A already, I may have missed this, but does your second half volume metric guidance explicitly take into account incremental exports from China flowing into India ahead of the ADDs potentially going into place? Is there some room for the outlook to evolve based on how actual trade flows may play out?

[John Romano, CEO at Tronox]

Could you repeat it one more time? Just make sure I get the answer right.

[Aaron Rosenthal, Executive Director of Credit Research at JPMorgan]

Yeah. Once again, I guess with respect to your second half volumetric guidance on TiO2, wondering if it takes into account some sort of market share considerations with respect to more Chinese products flowing into India ahead of ADDs potentially going back into place? If not, maybe how the outlook could evolve based on how actual trade flows play out.

[John Romano, CEO at Tronox]

It definitely is factored into our third quarter guide. When I think about the fourth quarter guide, which it's a bit early to get a good read on our order book, we have a 90-day kind of window on our order book, I would expect that we'll see similar volumes. As I mentioned, we're not losing share to China right now. The volumes that we're selling into India, it's not to say there won't be any seasonal adjustments there, the short answer to your question, it is taking it into account, I can't predict what they're going to do month to month.

[Aaron Rosenthal, Executive Director of Credit Research at JPMorgan]

That's fair. Thank you.

[John Romano, CEO at Tronox]

Thank you.

[Operator]

That concludes our question and answer session. Ladies and gentlemen, this will conclude today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Jennifer Guenther, Chief Sustainability Officer and Head of Investor Relations and External Affairs
• John Romano, CEO
• John Srivisal, SVP and CFO

Analysts

• David Begleiter, Director at Deutsche Bank
• Josh Spector, Managing Director of NA Chemicals and Packaging Research at UBS
• Duffy Fischer, Equity Research Analyst for US Chemicals at Goldman Sachs
• Jeff Zekauskas, Managing Director and Senior Equity Research Analyst at JPMorgan
• Hassan Ahmed, Co-founder, Partner, and Head of Research at Alembic Global Advisors
• John Roberts, Managing Director at Mizuho
• Frank Mitsch, President at Fermium Research
• John McNulty, Managing Director and Chemicals Analyst at BMO Capital Markets
• Ed Brucker, VP and High Yield Credit Research Analyst at Barclays
• Peter Osterland, Equity Research Analyst at Truist
• Aaron Rosenthal, Executive Director of Credit Research at JPMorgan