Tronox (NYSE:TROX) reported second-quarter 2026 revenue of $868 million, up 19% from a year earlier, as higher titanium dioxide, or TiO2, and zircon volumes helped offset lower average zircon selling prices, including mix. The company posted a $21 million operating loss and a net loss attributable to Tronox of $171 million, which included a $103 million valuation allowance related to certain U.S. state deferred-tax assets.
Adjusted EBITDA was $73 million, down 22% year over year but up 18% sequentially, while adjusted EBITDA margin was 8.4%. Adjusted diluted earnings per share was a loss of $0.51. The company generated $60 million of free cash flow during the quarter and reduced inventory by roughly $120 million from the first quarter, reaching its lowest inventory level since June 2024.
Volumes and Pricing Improve Sequentially
Sequentially, TiO2 revenue rose 14%, reflecting a 9% volume increase and a 5% increase in average selling prices, including mix. Zircon revenue increased 9%, with volumes rising 4% and pricing increasing 5%. Romano said the pricing gains were primarily driven by base-price increases rather than temporary surcharges.
The company has implemented additional TiO2 and zircon price increases in the third quarter. Romano said Tronox is increasingly shifting away from temporary surcharge mechanisms toward “more sustainable pricing actions” that account for market conditions, higher input costs and the value of reliable supply. Remaining targeted surcharges are largely tied to sulfur-related costs in Brazil and Thann.
Chief Financial Officer John Srivisal said pricing is expected to be the largest contributor to expected third-quarter earnings improvement. He also cited expected cost benefits from the completion of planned outages and from the company’s cost-improvement program, partly offset by elevated costs associated with the Middle East conflict and foreign-exchange headwinds.
Outages, Costs and Balance Sheet
Tronox said its second-quarter costs included the effects of a regulatory outage at its Stallingborough facility and an extended shutdown of its SR kiln. Romano said the SR kiln outage lasted more than 50 days, while the Stallingborough outage extended to 29 days from an originally scheduled 24 days. Both outages have now been completed.
Management said the company remains on track to achieve the high end of its $125 million to $175 million cost-improvement run-rate target by the end of 2026. Sales of lower-cost inventory, program savings and plant closures partially offset higher production costs, freight expenses and currency effects during the quarter.
At June 30, Tronox had $3.2 billion of total debt and $3 billion of net debt. Liquidity totaled $527 million, including $194 million of cash and cash equivalents. The company’s weighted average interest rate was approximately 6%, with about 75% of interest rates fixed through 2028. Its next significant debt maturity is not until 2029, according to Srivisal.
During the quarter, the company replaced an expired short-term Emirates revolving facility with a new $75 million long-term financing arrangement. Tronox also paid $45 million in capital expenditures, primarily for maintenance and safety, and returned $8 million to shareholders through dividends.
Third-Quarter Outlook and India Trade Measures
For the third quarter, Tronox expects TiO2 volumes to decline moderately in the mid-single-digit percentage range due to seasonal patterns. Zircon volumes are expected to moderate slightly after a strong first half, primarily because of the company’s inventory availability.
TiO2 pricing is expected to rise sequentially by a mid-single-digit percentage range, while zircon pricing is projected to increase by a mid- to high-single-digit percentage range. Tronox forecast third-quarter adjusted EBITDA of $95 million to $115 million and expects sequential margin improvement.
The company expects third-quarter free cash flow to be relatively neutral because of semiannual interest payments, but it reaffirmed expectations for meaningful positive free cash flow for full-year 2026. Its assumptions include approximately $190 million of net cash interest, less than $10 million of net cash taxes, less than $260 million of capital expenditures and working capital as a cash source of well above $100 million.
Romano highlighted developments in India, where the Indian Trade Defense Agency on Aug. 3 recommended reinstating duties on Chinese-made TiO2 at levels unchanged from those originally imposed in May 2025. The recommendation now goes to India’s Minister of Finance, which has 90 days to decide.
Romano said the duties, ranging from $460 to $681, would not eliminate Chinese imports but could help create a more competitive market. He said Chinese exports into India have increased, potentially as customers build inventory ahead of a possible reinstatement, though Tronox’s own India volumes rose from the first quarter to the second quarter.
The company is also monitoring anti-dumping investigations in Australia and the United Kingdom and is evaluating possible anti-absorption actions in markets where duties already exist.
Rare Earths Project Remains Under Evaluation
Tronox continues to advance its rare-earth strategy while seeking financing sources, potential customers and strategic partners. The company expects its definitive feasibility study for an Australian cracking and leaching facility producing mixed rare earth carbonate, or MREC, to conclude in the third quarter of 2027.
The planned Australian facility would have expected capacity of 10,000 tons annually on a total rare-earth-oxide basis, with a potential late-2029 startup if the project continues on its current path. Tronox is also evaluating a downstream refinery for separated rare-earth oxides, including a potential location at its Hamilton, Mississippi, site.
Romano said the company does not currently need a technology partner for the initial Australian MREC phase, but it continues to assess potential partners for a separated-oxides facility. He said the company is prioritizing completion of the Australian feasibility study before providing more detailed capital estimates.
About Tronox (NYSE:TROX)
Tronox Holdings plc 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.
