DCC LANSCO Discusses State of the Pigments Industry

Coatings World interviewed Frank Lavieri, EVP sales and marketing at DCC LANSCO on the state of the pigments market.

CW: How did the pigments market perform in 2018?

Lavieri: 2018 was a tumultuous one for the Pigment industry because of the “blue sky” initiatives in China, which disrupted the supply of raw materials and pigments, combined with the exceptional tariffs the U.S. added to pigments and raw materials from China on September 24th.  In response to these issues, there have been numerous price announcements and shortages throughout the industry making 2018 the most unstable since 2008. DCC LANSCO performed well in 2018 as we were able to supply products using both our manufacturing facilities and sourcing expertise to minimize most shortages.

CW: What are the major trends and challenges influencing the global pigments market today?

Lavieri: The Organic Pigment industry of today is reliant on trade with China whether it be for raw materials or finished pigments. In 2018 the Chinese government began tightening their environmental laws and compliance assurance in order to reduce air pollution and have cleaner water. These changes are broadly referred to as “blue sky” initiatives and are having the intended effect. These initiatives are being implemented very quickly and seemly with little warning to chemical factories causing waves of factory shutdowns. Two of the most noticeable changes are that natural gas is replacing coal-fired boilers and wastewater treatment facilities are being updated to meet tighter regulations.  The implementation of these initiatives has caused supply disruptions and price increases.

On Sep. 24, the U.S. government instituted special tariffs on $200 billion of products from China including most pigments and raw materials to make them. China is the largest supplying country of pigments and raw materials to the U.S. so the impact on our industry is large. This has also lead to increases in prices and product shortages.