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    Features

    Pigments Update

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    Pigments Update
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    Kerry Pianoforte, Editor01.07.19
    Coatings World: How did the pigments market perform in 2018? 

    BASF: Globally, there is at present a lot of uncertainty in the pigment market: the effect of potentially increased trade barriers between U.S. and China (and potentially others) is difficult to estimate and stays a reason for concern. Also, a private spending dip in China as well the environmental politics which might have an impact on availability and cost of raw materials increase uncertainty. In addition, the “diesel scandal” in Europe clearly puts a burden on European car production and hence the demand for automotive coatings. And there is the Brexit. All together lots of factors that contribute to uncertainty which will make the start into 2019 difficult. Due to this background, the growth expectations for automotive coatings throughout all regions are not positive which results in the expectations of a downturn for at least the first quarter in 2019.

    Clariant: In 2018, the organic pigments market continued to develop in line with the coatings market segments and in correlation to regional GDP growth rates.  Color trends over the past couple of years have had a negative impact on organic pigment usage, however, we are seeing a shift toward a more colorful palette in many of the coatings segments. We are seeing blues, greens and violets being highly promoted with a strong consumer acceptance.  In addition, there is a trend toward metallic shades in various applications with an increasing need for transparent organic pigments.

    DCC LANSCO: The pigments market started off slow in the first half of 2018. Raw material costs increased as a result of stricter environmental enforcement, particularly in China, which caused plant closures and consolidations. The second half of the year has seen a gradual decrease in raw material volatility, creating more stability for pigment manufacturers.

    Heubach: The pigments’ market performance was a diverse picture in 2018.  While the market was growing for coatings and plastic masterbatch industries, there was again a weakness in some decorative coatings market areas.  Several segments of the pigment market were impacted significantly by shortages and major cost increases in raw materials, mostly due to environmental issues in China which are still being addressed. Most of these increases could not be absorbed and impacted our customer base. Heubach is backward integrated to produce crude for automotive grade pigments to ensure availability and consistent quality. Heubach has also invested in a second manufacturing location for anti-corrosive pigments to make more pigment available to our customers and ensure availability in the future.

    Sun Chemical: 2018 will be remembered for many reasons and China’s influence on global manufacturing may be one of them. The consolidation of basic chemical manufacturing into China has left some of the coatings industry vulnerable to fast-paced political and environmental changes. Trade wars and tariffs may or may not be permanent and are certainly significant, but the rapid moves by Chinese authorities to achieve environmental improvements have impacted many levels of the coatings industry.

    Although an overall positive move, environmental inspection and city-wide closings of manufacturers have created tight supply and uncertainty around key raw materials. Manufacturers may or may not return to production as they determine their ability to meet new requirements. 

    Moving forward, managing supply, strengthening partnerships and formulating agility will be critical to meet customer requirements and ensure an uninterrupted supply of product. With over 20 pigment manufacturing plants globally, – including Asia, Europe, South America, and being the largest pigment producer in North America – our supply chain team has established contingencies and sourcing from a broad global supply base. Sun Chemical remains flexible and

    CW: Geographically, which regions offer the most opportunity for growth?

    BASF: For decorative, architectural and industrial coatings we expect growth with regional differences: Asia and especially China are regions where we expect good growth opportunities for our business which is well prepared to meet the stricter regulations, e.g. for lead chromate replacement and VOC (volatile organic compound) limits.

    Clariant: In Decorative Coatings, we expect above-average growth in emerging regions like China and India. In these emerging markets, there currently is a low consumption of paints in relation to the population when compared to traditional markets in Europe and North America, indicating a potential for growth.  Further, replacement of lead chromates has had a positive effect on organic pigments volume growth in these regions. In Europe and North America, we see a consistent value of the pigment market.

    DCC LANSCO: As we see the middle-class in countries such as China, India, and parts of Africa grow significantly, we’re seeing an increased number of opportunities for our industry. As their disposable income increases, so does the tendency for consumers to purchase items that incorporate pigments, dispersions and preparations.

    Heubach: The largest opportunity based on market growth continues to be in some Asian markets, as well as Latin America as these economies still are growing at higher rates than the traditional markets. However, there is an opportunity to grow in all regions in the coatings area especially industrial coatings applications, given the broad line of inorganic and organic pigments and dispersions that Heubach manufactures.

    While we see growth potential in the typical areas like Latin America and Asia Pacific and for a wide variety of applications, the trend still continues towards high-performance pigments.  In the NAFTA (USMCA) and Europe there are opportunities but mainly concentrated in industrial coatings.

    Sun Chemical: Opportunities for growth are available in all markets including the mature markets of Europe and the United States. Pockets of regional growth opportunities can be found in areas driven by unique local market requirements. Products such as our Palomar Blue 15:1 248-4848 are filling an important market need as suppliers in Asia exit the market. 

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

    BASF: The expansion of color space both in colored pigments as well as in effect pigments stays a crucial requirement in all coatings markets. Also, the ease of handling and the incorporation in paint are of relevance. Apart from this, customers increasingly demand sustainable solutions, which goes along with stricter governmental regulations. With outstanding expertise in PS&R (product safety & regulatory) BASF Colors & Effects has a very broad portfolio of pigments that comply with the latest regulations and we have the capacities for proactive customer support if they face regulation changes. A current example is our portfolio of MIT-free Luconyl NG and Xfast, which has been introduced to the market in Summer 2018. This way our customers can adopt in time to meet the new Ecolabel requirements when they become effective in 2020.

    Clariant: Environmental regulations in China are having a significant impact on the availability of key base raw material.  Clariant works to offset inflation and rising raw material costs through our operational excellence program.  However, global shortages have resulted in increased raw material costs and when the impact cannot be mitigated Clariant has had to pass on these increases to customers. With the increasing stringency of regulations and move toward sustainability, we see a clear demand for functionality in our pigments which brings additional challenges and opportunities.  While there is concern about the challenges of the trade war between the U.S. and China, we have found the impact to be limited.

    DCC LANSCO: The trends and challenges this year are one and the same. First of all, we’re seeing more of a focus on reducing our carbon footprint across our industry. This is definitely a step in the right direction to help reduce pollution around the world. Certain areas of the world have initiated their own specific methods of regulatory compliance (e.g. REACH in Europe).

    These cost millions of dollars in preparation, application, and registration fees up front as well as on an annual basis. Furthermore, downstream consumers are becoming more environmentally aware, causing a shift towards products that create less waste and less harm to the environment. This creates its own set of challenges to pigment manufacturers and suppliers. At DCC LANSCO, we are committed to sustainability throughout our value chain, regulatory compliance while continually enhancing our product line through technological advances.

    Heubach: Major trends affecting the global pigment market over the past years have included changes in REACh and other regulations, and raw material issues (pricing and availability), we expect these to continue for the foreseeable future.

    Specifically there have been significant shortages and price increases of raw materials for organic pigments (e.g. PB60-crude, AZO-coupling agents). Inorganic pigments have not escaped these same type shortages and associated price increases.  Specifically materials such as Cobalt & Vanadium have been dramatically affected.  Therefore, powerful sourcing regarding price/availability/responsible care is increasingly important.

    The trend to higher performing pigments across all application areas continues, as well as increased regulatory requirements.

    Sun Chemical: We’re seeing clarifying legislation from the FTC being created regarding environmental claims. Although based on measurable attributes, the guidelines may alienate some non-technical consumers as they struggle with industry terminology defining zero VOC claims. That could shape the market in the future, causing some coatings manufacturers to move away from using environmental claims as a marketing tool thereby potentially devaluing them. The coatings industry has made significant improvement in response to consumer desires and hopefully this will continue in light of marketing guidelines.  

    CW: How are you responding to the demand for more sustainable solutions?

    Clariant: At Clariant, EcoTain is our flagship label for products and solutions offering outstanding sustainability advantages.  EcoTain products add value to customers and benefit society as a whole. Each product and solution carrying the EcoTain label has undergone a systematic, in-depth screening process using 36 criteria in three sustainability dimensions: social, environmental and economic. This ambitious benchmark distinguishes products that significantly exceed market standards in general, have best-in-class performance in one or several criteria, and make overall sustainability contributions. EcoTain products actively support the sustainability efforts of our customers, without compromising performance. For example, one range of products, the Easily Dispersible (ED) Pigments, significantly improve the eco-footprint in paint manufacture by removing the bead mill step. The shortened processing time leads to increased production capacity while simultaneously generating savings in electricity consumption and generating less waste water. Our Easily Dispersible pigments offer additional opportunities to simplify co-dispersion for mass production of intense color shades for lead-free industrial paints and coatings.

    DCC LANSCO: DCC LANSCO is committed to customer satisfaction and innovation while reducing our impact on the environment & improving our carbon footprint. We maintain and comply with an Environmental and Quality Management System, as outlined in our Environmental Policy. This year, we’ve invested over $13 million towards the development and support of our pigment manufacturing business, from environmental initiatives and creating efficiencies in the chemical processing system, to improving the technology behind our products. The intent of these investments was to provide our customers with a reliable and consistent supply of high-quality innovative products, while remaining environmentally responsible. Since the initiation of these programs we’re already seeing significant results. We’ve decreased our air emissions, reduced the amount of electricity used, improved our water efficiency, decreased fuel requirements and more!

    Heubach: Heubach has been a market leader in sustainable practices and providing sustainable solutions for decades. But the market is changing: while 30 years ago the sustainable solution was to change from chromate-containing anticorrosive pigments to zinc phosphate pigments, now there is the changeover to zinc-free anticorrosive pigments. Heubach is ready to serve this market and has invested in a new production site for anticorrosive pigments in the US to meet the increasing volume demand of our customers.

    Furthermore, as a self-manufacturing producer of both inorganic & organic pigments, we offer a number of hybrids and sustainable pigment replacement solutions to the pigment consumer market-place (HEUCODUR/HEUCOFIT LR /TICO/MONOLITE).

    The Heubach model as a responsible manufacturer of pigments for over a century differentiates us from our competition and can be witnessed by visiting our manufacturing sites.  We have the advantage of a solid base in Germany, where sustainable solutions have long been the norm combined with multigenerational discipline, and proven engineering.  We apply the same expectations to all our manufacturing sites, and are therefore ahead of the curve in many areas. Great efforts are being taken to continue to improve safety, reduce energy and water consumption, as documented in our first sustainability report this year.

    Sun Chemical: There are several facets that encompass sustainability, including renewable raw materials, new environmentally-friendly technologies and responsible manufacturing. Sun Chemical strives to meet the demands of customers for sustainable solutions by utilizing all three of these approaches.

    On the technology side, in addition to our offerings to replace inorganic pigments, Sun Chemical has a family of organic pigments designed to have a smaller environmental footprint based on our “do-more-with-less” approach. The family includes Sunbrite Yellow 74, Fastogen Violet 23 and Quindo Red 122. These products are primarily designed for deco coatings, but also find usage in a wide array of industrial coatings.  Their environmental benefit comes from their higher tint strength, allowing formulators to reduce their usage. Reducing consumption is one of the most effective ways to improve all environmental aspects from CO2 output and raw material usage to energy reduction, packaging, and shipping.

    Coatings customers are not only seeking ways to improve the sustainability of their own products and manufacturing but are also looking to suppliers that do the same. Sun Chemical carefully tracks and publicly report our advancements in sustainability to assist customers in making informed decisions. We have had a number of successful programs that include biogas-to-steam generation for our Yellow 74 production, on-site hydro-electric mills to offset our power requirements needed to produce metallic pigments, and installation of solar-electric panels and other programs by our parent company, DIC that have offset more than 38,000 tons of CO2. 
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