Kerry Pianoforte, Editor08.10.18
The value of the high-performance pigments (HPP) market was estimated at $4.75 billion in 2016, rising to $5.49 billion in 2021 at a compound annual growth rate (CAGR) of 2.9 percent, according to the latest report from Smithers Rapra. In volume terms, global consumption of high-performance and specialty pigments is expected to total 178,844 tons in 2016, rising to 206,921 tons by the end of 2021 at a CAGR of three percent.
The HPP market is highly competitive. Coatings manufacturers who purchase HPPs know they are paying a premium price and expect these products will offer outstanding performance characteristics such as high resistance to heat and light, enhanced weather fastness, and outstanding visual effects.
“Complex Inorganic Colored Pigments are the backbone of colored high-performance coatings,” said Christine A. Gehres, VP Business Unit Sales & Marketing, Heucotech, Ltd. “Using them in combination with organic pigments makes hiding and brilliant surfaces become true. Using them by themselves will result in long-lasting color stability.
“In terms of anticorrosive pigments there are different requirements within the protective coatings industry depending on the area of application” she added. “Some industries need higher protective properties and have to fulfill more demanding requirements, which can only be guaranteed by selecting high-performance pigments.”
“The usage of high performance organic and special effect pigments is closely linked to certain color shades and high durability requirements,” said Jens Reininger, head of strategic marketing and KAM, BU Pigments Coatings at Clariant. “If there was no real need coming from these topics, coatings manufacturers have chosen more economic options in the past. However, due to decreasing price levels of especially organic pigments over the last years, the hurdle for coatings manufacturers to use HPP is lower today and increasing their demand.”
From a technical standpoint, the most important property exhibited by high-performance pigments that distinguishes them from other pigments is their durability in the applications. “Some examples of this include light fastness and resistance to chemical attack and high temperatures,” said Michael T. Venturini, marketing director, Coatings, Sun Chemical Performance Pigment. “Use of effect pigments allows customers to highlight their products in terms of design and appearance, drawing the end-use customer to their lines and providing consumer appeal. In addition, the metallic series of pigments provide functional properties to end-use applications such as improved anti-corrosion, thermal stability, and UV reflectance.”
Selecting the right HPP is a balancing act between cost and performance. HPP must offer added value to justify their price tag. “Selecting pigments for a formulation is always driven by a cost/performance analysis, which will indicate the pigment needed,” said Falko Orlowski, EVP marketing and sales at Trust Chem. “Even though they come at a higher price, it is often hard to replace an HPP with a lower performing pigment.”
HPP suppliers Coatings World spoke with indicated that 2017 was a solid year with good growth across the board.
Heubach saw strong demand for inorganic and organic HPPs despite increasing raw material costs and the different political challenges, especially toward the first half of the year. “ Ongoing replacement of Chrome Yellow/Molybdate Red and the growing demand from outdoor applications supported the organic growth of Heubach’s Complex Colored Inorganic Pigment line,” said Gehres. “The anticorrosive market was positively affected by the growth within the coatings market. Heubach´s non-toxic and high-quality anticorrosive products meet the latest market needs and represent state-of-the-art solutions within the anticorrosive pigment market.”
“There was a very solid economic environment in almost all regions,” said Rose Qin, global business management, pigments for Coatings, BASF. “This was not only the case for high-performance organic pigments but certainly as well for the high-performance effect pigments. The colored pigments market is clearly influenced by color trends and color popularity in the various applications. All in all, it can be said that the color trend was rather balanced.”
“In 2017, the high-performance pigments market developed faster than GDP and outperformed other areas,” said Stefan Ohren, head of PM HPP, BU Pigments Coatings at Clariant.
Trade Wars and Other Challenges
Despite these positive developments in 2017, HPP suppliers are now facing numerous challenges in 2018. Rising raw material prices have always been a concern, but an escalating trade war with China could add to the concerns.
According to Gehres, the uncertainty regarding supply and raw material cost started to slow down the demand during the second half of 2017. “Moreover, the speculation regarding potential import duties causes some damage by itself as it creates issues like delayed investments before duties are even imposed. It remains to be seen what and to what extent specific duties may impact our industry and the industries we serve.”
Raw material cost increases have been significant for some pigment classes in 2017 and in some cases, the increases are ongoing in 2018. “The cost increases are mainly driven by reduced capacities or shortage of raw materials due to environmental issues and shutdowns of production in China, but also due to high demand for specific raw materials,” said Gehres. “All this is further supported by unfavorable currency exchange rates. Additionally, it seems to get more and more difficult to get reliable forecasts for raw materials...”
The first half of 2018 was strong in sales with noticeable growth compared to last year, according to Orlowski. “The possible tariff increases and trade war with China will affect sales and pricing for the second half of the year if this comes to fruition. Especially for pigment manufactures from China, this could result in a steep cost increase for products offered to the U.S. market and also bring opportunities to competitors from other regions.”
Trust Chem is trying to ease the raw material cost increases by managing its inventory and logistics. “The Chinese government and environmental improvements drive most of the base raw material increases,” added Orlowski. “Unfortunately there are several C.I.s we are not able to buffer the increases on and we have to pass them along to the marketplace. With most of the pigment intermediates across the world coming from China and India, as the price of intermediates rises over the next few years, the price of pigments will switch from a previously falling trend to a rising trend.”
“The influence of a trade war should be limited, however, the environmental protection program in China will have a greater impact on the availability of HPP than customs or import restrictions,” cautioned Rolf Tittmann, head of product management HP Azo BU Pigments Coatings at Clariant. “Clariant is always trying to offset inflation through our operational excellence. However, in the light of increasing raw material prices due to global shortages, Clariant has had to pass on these increases to our customers.”
“Naturally any activities that can affect trade are a concern and political activities like the potential trade war between the United States and China, underscore the value of Sun Chemical’s global strategy of regional manufacturing and fully integrated supply chain,” said Venturini.
Automotive Segment Drives Growth
Automotive coatings are a key application for HPPs and increased automotive sales, especially in emerging markets like China and India, is driving growth.
“We clearly see an increasing demand in automotive coatings following the megatrend of transportation and for more stylish color shades in industrial coatings,” said Reininger. “Continuous lead replacement in emerging markets also contributes to an increasing demand for highly opaque and durable organic pigments.”
Although historically China has been the largest consumer of HPPs, India is proving to be a significant player in this market as well.
“For automotive coatings applications, India is rapidly becoming the growth area of the whole Asian region, but clearly still on a much lower volume level than China,” Qin said. “For architectural coatings inside and outside of houses and buildings we see a demand for much more colorful pigments compared to other parts of the world. Even though lead chromate pigments have been banned in many countries for many years, they are still widely used in India and several countries within South East Asia, especially in industrial coatings. At the same time, many coatings customers in these regions have already started moving to lead-free formulations, which resulted in a strong demand increase for high-performance pigments.”
India and the region are significant to the pigment market both as a producer and as a consumer. “From a production viewpoint, India’s evolving environmental governance has created a dynamic situation that is driving coatings customers to seek the security of supply outside of the region,” said Venturini. “REACH regulations in the European Union are also driving shifts in the market as coatings customer requiring technical support move to global companies like Sun Chemical with the technical depth for product registrations.
India and especially South East Asia have still tremendous potential and their demand for higher performing pigments was strongly driving Heubach’s growth in Asia-Pacific last year.
“The trend to high-performance pigments in these emerging regions is still strong,” Gerhes said. “One major driver is the conversion from solvent-based to water-based container coatings in China. This will affect the overall market through the growth of the water-based coatings sector. Complex Inorganic Colored Pigments are ideal candidates for combinations with organic high-performance pigments, offering price/performance advantages compared to organic pigments alone. This solution is becoming more widely recognized.”
Heubach has been investing continuously to increase the capacity of organic HPPs in India, as well as colored inorganic pigments in Germany and anticorrosive products in the U.S. “The main growth of Complex Inorganic Colored Pigments arises from organic growth of existing products especially high tinting strength versions, which were introduced in 2017,” said Gehres.
The HPP market is highly competitive. Coatings manufacturers who purchase HPPs know they are paying a premium price and expect these products will offer outstanding performance characteristics such as high resistance to heat and light, enhanced weather fastness, and outstanding visual effects.
“Complex Inorganic Colored Pigments are the backbone of colored high-performance coatings,” said Christine A. Gehres, VP Business Unit Sales & Marketing, Heucotech, Ltd. “Using them in combination with organic pigments makes hiding and brilliant surfaces become true. Using them by themselves will result in long-lasting color stability.
“In terms of anticorrosive pigments there are different requirements within the protective coatings industry depending on the area of application” she added. “Some industries need higher protective properties and have to fulfill more demanding requirements, which can only be guaranteed by selecting high-performance pigments.”
“The usage of high performance organic and special effect pigments is closely linked to certain color shades and high durability requirements,” said Jens Reininger, head of strategic marketing and KAM, BU Pigments Coatings at Clariant. “If there was no real need coming from these topics, coatings manufacturers have chosen more economic options in the past. However, due to decreasing price levels of especially organic pigments over the last years, the hurdle for coatings manufacturers to use HPP is lower today and increasing their demand.”
From a technical standpoint, the most important property exhibited by high-performance pigments that distinguishes them from other pigments is their durability in the applications. “Some examples of this include light fastness and resistance to chemical attack and high temperatures,” said Michael T. Venturini, marketing director, Coatings, Sun Chemical Performance Pigment. “Use of effect pigments allows customers to highlight their products in terms of design and appearance, drawing the end-use customer to their lines and providing consumer appeal. In addition, the metallic series of pigments provide functional properties to end-use applications such as improved anti-corrosion, thermal stability, and UV reflectance.”
Selecting the right HPP is a balancing act between cost and performance. HPP must offer added value to justify their price tag. “Selecting pigments for a formulation is always driven by a cost/performance analysis, which will indicate the pigment needed,” said Falko Orlowski, EVP marketing and sales at Trust Chem. “Even though they come at a higher price, it is often hard to replace an HPP with a lower performing pigment.”
HPP suppliers Coatings World spoke with indicated that 2017 was a solid year with good growth across the board.
Heubach saw strong demand for inorganic and organic HPPs despite increasing raw material costs and the different political challenges, especially toward the first half of the year. “ Ongoing replacement of Chrome Yellow/Molybdate Red and the growing demand from outdoor applications supported the organic growth of Heubach’s Complex Colored Inorganic Pigment line,” said Gehres. “The anticorrosive market was positively affected by the growth within the coatings market. Heubach´s non-toxic and high-quality anticorrosive products meet the latest market needs and represent state-of-the-art solutions within the anticorrosive pigment market.”
“There was a very solid economic environment in almost all regions,” said Rose Qin, global business management, pigments for Coatings, BASF. “This was not only the case for high-performance organic pigments but certainly as well for the high-performance effect pigments. The colored pigments market is clearly influenced by color trends and color popularity in the various applications. All in all, it can be said that the color trend was rather balanced.”
“In 2017, the high-performance pigments market developed faster than GDP and outperformed other areas,” said Stefan Ohren, head of PM HPP, BU Pigments Coatings at Clariant.
Trade Wars and Other Challenges
Despite these positive developments in 2017, HPP suppliers are now facing numerous challenges in 2018. Rising raw material prices have always been a concern, but an escalating trade war with China could add to the concerns.
According to Gehres, the uncertainty regarding supply and raw material cost started to slow down the demand during the second half of 2017. “Moreover, the speculation regarding potential import duties causes some damage by itself as it creates issues like delayed investments before duties are even imposed. It remains to be seen what and to what extent specific duties may impact our industry and the industries we serve.”
Raw material cost increases have been significant for some pigment classes in 2017 and in some cases, the increases are ongoing in 2018. “The cost increases are mainly driven by reduced capacities or shortage of raw materials due to environmental issues and shutdowns of production in China, but also due to high demand for specific raw materials,” said Gehres. “All this is further supported by unfavorable currency exchange rates. Additionally, it seems to get more and more difficult to get reliable forecasts for raw materials...”
The first half of 2018 was strong in sales with noticeable growth compared to last year, according to Orlowski. “The possible tariff increases and trade war with China will affect sales and pricing for the second half of the year if this comes to fruition. Especially for pigment manufactures from China, this could result in a steep cost increase for products offered to the U.S. market and also bring opportunities to competitors from other regions.”
Trust Chem is trying to ease the raw material cost increases by managing its inventory and logistics. “The Chinese government and environmental improvements drive most of the base raw material increases,” added Orlowski. “Unfortunately there are several C.I.s we are not able to buffer the increases on and we have to pass them along to the marketplace. With most of the pigment intermediates across the world coming from China and India, as the price of intermediates rises over the next few years, the price of pigments will switch from a previously falling trend to a rising trend.”
“The influence of a trade war should be limited, however, the environmental protection program in China will have a greater impact on the availability of HPP than customs or import restrictions,” cautioned Rolf Tittmann, head of product management HP Azo BU Pigments Coatings at Clariant. “Clariant is always trying to offset inflation through our operational excellence. However, in the light of increasing raw material prices due to global shortages, Clariant has had to pass on these increases to our customers.”
“Naturally any activities that can affect trade are a concern and political activities like the potential trade war between the United States and China, underscore the value of Sun Chemical’s global strategy of regional manufacturing and fully integrated supply chain,” said Venturini.
Automotive Segment Drives Growth
Automotive coatings are a key application for HPPs and increased automotive sales, especially in emerging markets like China and India, is driving growth.
“We clearly see an increasing demand in automotive coatings following the megatrend of transportation and for more stylish color shades in industrial coatings,” said Reininger. “Continuous lead replacement in emerging markets also contributes to an increasing demand for highly opaque and durable organic pigments.”
Although historically China has been the largest consumer of HPPs, India is proving to be a significant player in this market as well.
“For automotive coatings applications, India is rapidly becoming the growth area of the whole Asian region, but clearly still on a much lower volume level than China,” Qin said. “For architectural coatings inside and outside of houses and buildings we see a demand for much more colorful pigments compared to other parts of the world. Even though lead chromate pigments have been banned in many countries for many years, they are still widely used in India and several countries within South East Asia, especially in industrial coatings. At the same time, many coatings customers in these regions have already started moving to lead-free formulations, which resulted in a strong demand increase for high-performance pigments.”
India and the region are significant to the pigment market both as a producer and as a consumer. “From a production viewpoint, India’s evolving environmental governance has created a dynamic situation that is driving coatings customers to seek the security of supply outside of the region,” said Venturini. “REACH regulations in the European Union are also driving shifts in the market as coatings customer requiring technical support move to global companies like Sun Chemical with the technical depth for product registrations.
India and especially South East Asia have still tremendous potential and their demand for higher performing pigments was strongly driving Heubach’s growth in Asia-Pacific last year.
“The trend to high-performance pigments in these emerging regions is still strong,” Gerhes said. “One major driver is the conversion from solvent-based to water-based container coatings in China. This will affect the overall market through the growth of the water-based coatings sector. Complex Inorganic Colored Pigments are ideal candidates for combinations with organic high-performance pigments, offering price/performance advantages compared to organic pigments alone. This solution is becoming more widely recognized.”
Heubach has been investing continuously to increase the capacity of organic HPPs in India, as well as colored inorganic pigments in Germany and anticorrosive products in the U.S. “The main growth of Complex Inorganic Colored Pigments arises from organic growth of existing products especially high tinting strength versions, which were introduced in 2017,” said Gehres.
