“We saw the high performance and special effect pigments rebound in 2010 from the worldwide crisis of 2009, but we have not yet seen pre-recession levels,” said Mehran Yazdani, vice president, marketing, performance pigments, Sun Chemical. “We continue to see an upswing in the high performance and special effect pigments markets during the first and second quarters of 2011.”
“The key challenge we face to maintain this growth are the costs of raw materials,” he added. “Due to the supply rationalization that occurred during the downturn, and the increased costs of environmental and regulatory compliance, we have seen significant cost increases of the raw materials that we use to manufacture our pigments. Despite this hurdle, we expect further growth in 2011 and beyond.”
JDSU reported that effect pigments grew in the last 12 months as a result of improved sales to automotive coatings suppliers. “JDSU offers a comprehensive range of professional color services, including manufacturing of ChromaFlair, light interference pigment and SpectraFlair, light diffractive pigment, to create sophisticated and unique color options for consumers,” said John Book, product line manager, custom color solutions, JDSU.
“The market for HPP pigments continues to show steady but modest improvement versus 2010,” said Reiner Martens, managing director, Heubach. “The automotive market for HPP continues to show relatively strong growth versus 2010. The industrial market has shown only relatively small incremental growth and the building industry continues in a ‘recession’ type of economy due to low interest rates, high foreclosure rates and low home values.”
Making inroads into new markets
Traditionally used for automotive coatings, HPP and special effect pigments are also making headway into new market segments.
According to Book, automotive applications in emerging markets still hold the highest potential for growth in the coming years followed by cosmetic ingredients. “In addition to new effect pigment, JDSU is investing infrared reflective coatings for heat management and passivated pigments for waterborne coatings,” he added.
“HPP and effect pigments offer high-quality, durable and unique color options for consumers and brands. Although there is an added cost for these solutions, they are suitable for use on durable and long lasting items that not as price sensitive.”
“For high performance pigments, the automotive market has the greatest potential and it is anticipated to be strong for the next two to three years,” said Martens. “The industrial market will in all likelihood remain relatively flat and the building industry will continue to struggle. We have also seen indications in certain niche markets where customers are looking for more durable products in the architectural coatings area.”
“From the market segment viewpoint, we expect continued growth in automotive, architecture, fiber, nylon, graphic arts, specialties and niche markets,” said Yazdani. “The automotive market has seen an increase in demand for unique color and effects. This trend continues to help fuel the continued growth in high performance and effect pigments.”
China drives growth
China continues to drive growth in the HP and special effects pigments market. This can be attributed to a number of factors including the expanding auto market and the rapidly increasing middle class.
According to Rick Campbell, president, Trust Chem USA, the markets for high performance and special effect pigments have shown slow growth worldwide. “However, growth continues at a steady pace in China,” he said. “In the past few years, there is an obvious increase in the use of high performance pigments in China. This is primarily because of the rapid development of the automotive industry in China. Meanwhile, pigment consumers are paying more attention to environmental protection issues. So chrome yellow and other harmful pigments are being replaced by these high performance pigments, which also stimulates the growth of the HPP market. Our company share is growing in the China market, as there is an increase in the sales volume of quinacridone, isoiondolinone and high performance pigments.”
Heubach has established Hangzhou Heubach Co., Ltd. in Hangzhou, China. “Hangzhou Heubach complements and expands our presence in China in order to ensure short delivery times and the utmost in technical service to our global and local customers,” said Martens. “In the near future, the facility will be expanded to manufacture new products for the Heubach portfolio.
“Consumption of HPP as well as the raw materials for HPPs in China has become a factor in the global market and is significant enough to have an impact on global pricing,” added Martens. “With the emergence of the middle class in China and the continued build-up of infrastructure, the amounts of HPP pigments consumed in China have becomes significant.”
“JDSU has had a presence in China since 2000,” said Book. “JDSU has operations in emerging markets around the globe, from China to India to Brazil. This local presence allows JDSU to better collaborate with its customers and develop innovative, market-leading color solutions.”
High costs equals high performance
Customers pay a premium price for HPP and special effect pigments. As such, customers expect these products to offer the highest level of performance.
“Despite the higher costs, HPP show excellent performance including heat resistance, migration resistance and light resistance, and don’t contain lead and chromium,” said Wu. “The cost premium versus more conventional pigments is usually less when sourced from our JV factories in China.”
Sun Chemical’s color technology laboratories maintain a diverse portfolio with projects that include new high performance pigments, improved high performance pigments, self-dispersing pigments, novel effect pigments and even tunable color display technology.
Trust Chem has been working on studies in surface treatment to improve pigment performance. “We are focusing on how to reduce the cost of HPP on a large scale as we expand capacity,” said Campbell. “In the future we expect to manufacture some of our high performance pigments at a lower cost allowing for cost savings or at least price stability for our customers. We hope these pigments with high performance and reasonable costs can even be a preferred alternative to classic pigments and help us develop additional market share.”
Heubach GmbH is currently developing several IR-reflecting pigments that will expand its existing product portfolio. The IR-reflecting pigments are able to provide significant reductions in surface temperature that results in reduced degradation of the coating. Temperature differences such as between sunlight and shadowed areas and day and night will be evened out, which will reduce thermal warping.
“Nanotechnology has the potential to offer improved performance in several product areas for Heubach,” said Martens. “Heubach is currently working on several development projects involving nanotechnology in cooperation with universities, specialty companies and institutes. The main focus is now anticorrosive application for pigments.
“The goal for the customer is to attain increased performance for demanding applications while still being competitive,” Martens continued. “High performance pigments provide performance advantages including heat resistance, ease of dispersion, weathering, lightfastness and IR-reflection. Competition in the HPP area has continued to be strong which has resulted in a reduction in the pricing gap between HPPs and conventional pigments. As a result, additional applications for HPP pigments are being unlocked.”