Raw materials Coatings industry under heavy pressure | European Coatings

2022-11-10 14:38:44 By : Ms. Emily Zhang

According to CEPE, the trade association for the European coatings, printing inks and artists' paints industry, a complex mix of demand, capacity issues and scarce transport resources for key raw materials is increasing uncertainty in the supply chain. Despite huge implications for the industry, the association says the paint industry is working to reduce risks for customers.

"After a year marked by the COVID-19 pandemic, our industry faces serious challenges again in 2021 due to the rise in raw material prices," said CEPE Chairman André Vieira de Castro. There are several reasons for the increase, he said: an increase in demand for raw materials due to the expected economic recovery, a shortage of available raw materials due to bad weather conditions, and the closure of several plants, which makes raw material suppliers invoke "force majeure." In addition, transportation costs are increasing due to the sharp rise in oil prices.

André Vieira de Castro adds: "The burden for the industry is immense, as raw material prices account for more than half of the cost. Since January last year, costs for key components like epoxy resins have risen by 60 percent in Europe. The situation is similar for solvents, where the price of acetone and n-butyl acetate alone rose by 123% and 91% respectively"

As CEPE communicates, the current situation originated in Europe and Asia and in particular from the unexpectedly rapid V-shaped recovery in China, which is fueling demand for key raw materials. In addition to epoxy resins, the list of petrochemical raw materials in high demand includes polyester resins, polypropylene glycols, acrylic acids, acrylic resins, UV resins, polyurethane resins and solvents, according to the company. In parallel with petrochemical raw materials, global costs for pigments (including titanium dioxide, red and yellow iron oxide) also rose sharply. The main drivers of the price increases included strong demand in all industrial sectors, greater domestic supply needs in producing countries, general supply-demand imbalances and higher costs for pigment components.

According to CEPE, the current situation is further exacerbated by capacity problems: disruptions at producers in Asia and Europe - either due to factory closures or operational accidents - have significantly tightened supply. Another cost factor is scarce transportation resources, he said. The COVID-19 pandemic has led to a surge in demand in international trade, affecting global movements of shipping containers, he said. Container prices between China and Europe have increased more than 400% since the fourth quarter of 2020, he said.

While the paint industry is trying to cope as best it can with the current uncertainties, the pressures of the global market should give European decision-makers pause for thought, the association said. "Increased sustainability is undeniably the way forward, but global competition should not be ignored in the measures of the EU Green Deal. It is essential for Europe to have a strong chemicals industry with factories based in Europe in order to be more self-sufficient, otherwise it is the European economy as a whole which is under threat," concluded André Vieira de Castro.

Making coating systems more environmentally compatible is a burning issue for everyone in the industry, and one that is being fuelled by the European Green Deal. Learn all you need to know about sustainable coatings, how to produce coatings in a more environmentally friendly way and how to give coated products a longer service life. You will find an overview in the EC Tech Report of the many various approaches being adopted. We will dive deep into the European Green Deal, its key points and main purpose as well as consequences for the coating industry, see which new raw materials are being developed to replace or lower the content of products in the SVHC group and learn about different approaches to sustainable paint formulation.

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