Growing Industrial Coatings Market: Uptrend in Q1 during Pandemic [5 Recent Developments]
How much could the second wave of the Covid-19 pandemic impact the paints and coatings market in affected countries?
How are the lower production and the disrupted supply chain of raw materials affecting the prices of paints and coatings products across different world regions?
We have crossed the first quarter (Q1) in 2021, and still, a new wave of Covid-19 is affecting millions of lives and the economy in many countries. There is a continuous fight against the Covid-19 virus and ongoing research, trials, and use of vaccination, whereas most businesses face disruptive challenges. However, there is a positive bounce back in maintaining the safe workspace, healthy changed lifestyle, and top & bottom line of the income statement from the last year to this year in the overall paints and coatings industry.
Top companies in this market reported growth in their Q1, 2021 financial results. PPG Industries reported an increase of about 15% in net sales compared to Q1 last year. Similarly, Sherwin Williams said 12.3% growth in net sales. Akzo Nobel, the third-largest player in the paints and coatings market, has reported a 10% up in net sales. The key reason for this growth is high demand from the end-user markets, primarily decorative paints followed by coil & packaging coatings and general industrial coatings. Favorable foreign currency translation has also been another significant factor in net sales change.
The industrial coatings market is estimated to account for about 54.4% of the total paints & coatings market by revenue in 2020. The market is estimated to have a CAGR of 5.39% during the forecast period 2020-2026 to reach the value of USD 100,799.72 million in 2026.
Key Driving Factors
Demand for selected types of coatings has increased in Q1 2021. Three such demand increase is highlighted below.
Automotive Paints and Coatings
The demand for automotive paints and coatings has increased in Q1 2021 by showing recovery in productions, particularly in China, the USA, etc. On 3rd March 2021, Axalta introduced its innovative waterborne technology, i.e., Spies Hecker® Waterborne Full System, for China's refinishing customers. It will promote the sustainable development goal and green technology in the auto-refinish coatings market in the country.
The demand for Epoxy-based coatings has also increased due to its many advantages over other resin types.
Epoxy coatings show high water resistance and resistance to corrosion contributors like abrasion, humidity, acid, alkali, and seawater.
It can be formulated as 100% solid and can be used as high-solid epoxy in hull coatings, yacht or boat repairs, floor coatings, etc.
High vehicle traffic areas also use Epoxy-based coatings.
It is additionally used as a corrosion protection coating for iron, steel pipes, and fitting in the sugar refineries, oil & gas industry, paper mills, and water transmission lines.
DIY coatings products
The pandemic has also shown higher demand for DIY coatings products where homeowners used the coating products for furniture, cabinets, hardwood floors, etc. The powder-based coatings technology demand was the highest in 2020, and it continues in Q1 2021, as the powder-based industrial coatings offer low VOC emission, high performance, and cost-efficient.
Key Growth Blockers
Disruption in the supply chain of raw materials for the paints and coatings sector had been a key blocker in growth. Five key reasons for this disruption are:
Limited Production & supply of Crude Oil resulting in increased prices of raw materials like resins, epoxies, etc.
Supply-demand gap & increased price of TiO2, the gap is shrinking now with increased production capacity and supply by Chinese and global suppliers.
Backlogs, shortage of cont