The rapid development of the coatings industry? Paint profits in 2022 sound a "red alert"!

April 15, 2022

TDD-global

15912

Guide

Highlights at a glance

As China promotes green production, powder coatings gain market share due to their eco-friendly features. However, the coatings industry faces challenges like monotonous products and low-price competition, leading to a profit warning from the China Coatings Industry Association. Rising raw material costs have nearly doubled expenses for powder coating companies, raising concerns about sustainable growth amidst economic turmoil.

In the context of China's continuous promotion of production and environmental protection, powder coatings, as a green and environment-friendly industrial coating category, have no pollution, zero VOCs emissions, high recycling rate, simple coating process and Due to the high degree of automation, powder coatings have always attracted the attention of various countries since their introduction, and have become the new favorite of the coatings market. It is no exaggeration to say that powder coatings are rapidly grabbing market share and becoming the preferred industrial coatings category in the context of "dual carbon".

paint industry ， powder coating ，Global chemical raw materials

However, behind the rapid development, multiple chaos such as monotonous product structure, low-price competition and lack of innovation have also spawned. The problems behind the rapid development of the coatings industry broke out in an all-round way, sounding the "alarm bell" for the industry.

paint industry ， powder coating ，Global chemical raw materials

On March 8, the China Coatings Industry Association (NCIA) issued a heavy notice pointing out that the red warning for profits in the coatings industry has been sounded. This is the first warning signal of China's paint industry! The "Warning Letter" also pointed out that although the overall output and main business income of my country's coatings industry in 2021 are in positive growth, the growth rate of total profits has declined sharply since the beginning of the third quarter, and entered negative growth at the beginning of the fourth quarter. for negative growth. The China Paint Association emphasized in the "Warning Letter" that from the end of 2019 to the beginning of 2022, the global epidemic was raging and the international political situation was turbulent, which brought an unprecedented blow to the global economy. During the period, import and export trade was blocked, and the prices of chemical bulk raw materials continued to rise. The Chinese coatings industry in the gap between the end market and the raw material market has brought a huge impact.

In fact, the fundamental reason is that the prices of chemical raw materials in the world have skyrocketed. Since the epidemic, the main chemical raw materials in powder coatings, oxypolyester, curing agent, and titanium dioxide, have been on the rise, with price increases of 50%, 100%, and 75%, respectively. %, the cost of powder coating companies has almost doubled, so how to break the crisis of "increasing revenue without increasing profits" in the coatings industry?

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To survive in the cracks of the coating industry, "increase income without increasing profit" is such a crack!