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    Features

    Resins Market Update

    ...

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    Anthony Locicero, Associate Editor04.12.19
    Market growth is expected to be fueled by industries such as building and construction, packaging, general industrial automotive, marine, aerospace, and furniture, per MarketsandMarkets.

    The polyurethane segment is projected to account for the largest share of the coating resins market, according to MarketsandMarkets. Additionally, the automotive coatings segment is projected to be the fastest-growing end-use industry, the research firm reported.

    Balancing demands with risings costs

    Despite observed growth by industry experts, rising costs and raw material shortages continue to be an issue.

    Regulatory environments are getting stricter, according to Phil Robinson, market segment manager, General Industrial, BASF.

    “Rising costs and raw material shortages are hardly new occurrences in the coating industry,” said Eric Dumain, global marketing director for liquid resins at Arkema. “The supply chain in many feedstock-to-end-user flows remains fragile.”

    For Arkema, the key to staying ahead of the issues will be strong interpersonal ties with customers and suppliers, Dumain noted. 

    “With global material flows, the ability of companies to enact contingency plans and redundant manufacturing sites help reduce the risk of outages or shortages related to tariffs, trucking concerns or raw materials,” he added.

    “Resin suppliers for the coatings market have faced a double-edged sword for a two-year period with increasing raw material costs, scarcity of key raw materials such as Methyl Methacrylate due to supply constraints, and on the other hand, over-capacity in the market,” said Tom Zagore, global platform manager, Lubrizol Performance Coatings. “This has forced many suppliers to become more efficient in their manufacturing process, to scale down extraneous costs in development, and to look hard at consolidation. The balance is achieved by managing expenses and hopefully working on the ‘right’ projects that will provide differentiated value to key markets.”

    Even the largest companies are not immune to these hurdles.  

    “The challenges Sun Chemical faces are the same as every other company – rapidly changing tastes and market needs, government regulations and consumer preferences,” said the company’s Marketing Director of coatings, Michael T. Venturini.

    “Sun Chemical’s philosophy to deliver ‘solutions, tailor-made,’ shapes our relationships with our customers to learn and understand what drives their markets and helps us develop and bring them products that they specifically need to compete and succeed.”

    BASF’s can-of-paint approach to formulation allows the company to work closely with customers to “leverage different components of a formulation and meet their demands while minimizing cost impacts,” according to Camilo Quiñones-Rozo, market segment manager, architectural coatings, BASF.

    “Also, our integrated Verbund manufacturing approach allows us to mitigate to a great extend market fluctuations and constraints via backward integration and efficient use of resources,” Quiñones-Rozo continued. “Finally, our global footprint and familiarity with different technologies, allow us to identify alternative paths with viable precedents that may be a better fit for our customers under the current market dynamics.”   

    Robinson said BASF’s products are manufactured with techniques that “cannot be duplicated anywhere.”

    In regards to the Verbund, “the concept enables BASF to add value as one company through the efficient use of resources,” Robinson said. “Within Verbund manufacturing, production plants, energy, material flows, logistics and infrastructure are all integrated. The cost savings from this integration offset increasing costs of manufacturing found across the manufacturing landscape.”

    Part of Specialty Polymer Inc.’s business relationship includes doing “everything we can to keep costs contained so we don’t have to pass increases on,” per Greg Monaghan, applications manager for Specialty Polymers.

    Customer demands

    “Do more with less” is the market mantra, according to BASF’s Robinson – and the markets “consistently demand” improved products focused on better performance, increased sustainability and lower cost.

    “Continuous improvement and new innovation are necessary to keep up with these demands,” he said. “Many of BASF’s customers look to consolidate raw material by creating formulations that are applicable in all global regions.”

    According to Quiñones-Rozo, paint manufacturers seek support from BASF “to help them attain sustainable differentiation, whether that is via improved performance, an addition of new performance dimensions, or lower formulated costs” since resin is “the single most important driver of performance within a coating formulation.”

    “The recent inflationary pressures in the cost of raw materials for coatings have generated demand for developments that help control the total formulated cost,” Quiñones-Rozo said. “Greater TiO2 efficiency is a common request, along with lower coalescent demand. Another common request deals with functionalization of paints, where paint manufacturers seek to introduced new features that go beyond the standard beautify and protect objective of paint. Finally, from a sustainability standpoint, request for APEO-free materials is starting to become a norm, mainly driven by retailer’s guidelines.”

    Simplicity is key, according to Dumain.

    “In architectural paints and coatings, customers continue to expect coatings to simplify their daily lives – paints that resist staining from everyday household spills and can be easily applied while beautifying their surroundings,” he noted. “Technical performance such as resistance to dirt pickup resistance while retaining a low odor profile is expected. We expect higher demand for masonry coatings following global construction trends, along with elastomerics and roof coatings. Sustainability is a global theme, and this can mean long-lasting durability in addition to ensuring that eco-friendly ingredients are used wherever possible.

    “In industrial protective applications, construction efforts in the chemical and fluid transportation industries, as well as infrastructure repair and renovation drive the need for new corrosion resistant coatings, as well as coatings with improved UV durability,” he continued. “Industrial coatings end-users are constantly seeking ways to finish their projects faster and with fewer layers while achieving the same high performance that is critical for high-value projects.”

    “Small and midsize customers are facing significant competition by large players with large R&D budgets and large marketing budgets,” Monaghan said. “They are looking for innovative products to help them differentiate themselves on the marketplace and also allow them to meet the changing regulatory landscape with more stringent VOC requirements.” 

    According to the applications manager, “the SPI business model is unusual in that we work directly with the small and midsize customers in developing new products which give them direct access to our staff of polymer and coatings chemists. Our customers are the ones that truly understand their market niche and they bring us a wide variety of technical needs – it is our job is to give them the latest technology that can help them meet these needs.”

    Environmental regulations

    According to MarketsandMarekts, the use of environmentally-friendly products has been one of the most important rends in the coatings industry over the last decade.

    “Environmental regulations and social change for sustainable raw materials with less environmental impact are driving rapid change and innovation in all segments of the coatings market,” Venturini said. “The trend continues to move forward in Europe and the U.S. but is quickly growing in Asia driven by China’s regulations for improved air quality and reduced VOC emissions.”

    This has required paint producers to transition to powder, waterborne or other low-VOC technologies, the marketing director noted, adding that Sun Chemical Advanced Materials will work with parent company DIC Corporation “to provide resins with unique performance properties that are tailored especially for the end user’s application, such as one pack primers for adhesion to polypropylene and TPO that allow for lightweighting and recyclability of automotive parts.”

    Additionally, he said the company developed a range of acrylic binders in both solvent- and water-based technologies that meet the stringent requirements of premium global automotive manufacturers.

    “While regulations evolve more slowly in protective coatings, formulators are adopting the most environmentally friendly approaches where it is feasible, and accordingly, more formulators are converting their end-users to highly durable powder and high-solid solvent-borne products,” Dumain said.

    Growth in 2018 Industry experts observed growth during the previous calendar year.

    Dumain cited “the strong U.S. economy, job growth, increased consumer confidence to spend more discretionary income on durable goods and home-related upgrades” as examples.

    “The construction-related markets benefitted from more robust investment,” he added.

    Certain segments experienced faster growth than others due to some “significant” trends across the globe, noted Lubrizol’s Zagore. 

    “That’s because trends are dictated both by legislation and end consumers in the marketplace that focuses on technical service, quality, performance and environmental considerations,” he said.

    “We have seen a significant shift to waterborne emulsions away from the more traditional solvent-based acrylics and PUDs, particularly in the Asia Pacific region,” Zagore continued. “India and South Asia continue to grow coatings sales faster than the rest of Europe, and North America has seen a steady growth of the coatings market based on the robust economic environment in the U.S. We see some great potential as well in South America, particularly in Brazil, Mexico and Argentina with both our specialty and more standard resins.”

    “The U.S. market for architectural coatings resins grew by [roughly] two percent in 2018, in line with the growth experienced by the end market (ACA’s Industry Pulse Q4 2018),” said Quiñones-Rozo. “Heavily influenced by the health of the housing sector, growth within the architectural market was mainly driven by positive developments in new construction (both residential and non-residential). While the residential repaint sub-segment ([approximately] two-thirds of overall demand) is still expanding, the decline in existing home sales during 2018 dampened the overall growth of the architectural coatings market relative to prior years.”

    BASF’s Robinson said it isn’t “fair to so broadly characterize the resin market” – because it is “complex and diverse” – though there was indeed growth.

    “Resins found in coating systems service market segments from hi-tech aerospace to the paint you might have applied on the walls of your own home and everything in-between,” Robinson noted. “As diverse as the coating applications are, so are the technologies. High-performance waterborne resins with anti-corrosive performance are one technology that is seeing more growth than many of the other areas. Waterborne resins are considered more sustainable technologies primarily because they have little to no volatile organic compound (VOC) emissions. Low VOC resins are not only a [request] from consumers but an aspect of regulation.”

    Sales of UV-curables, waterborne and powder coatings resins were up at Sun Chemical, Venturini said.

    “We typically expect our growth to outstrip the coatings market growth rates due to our investments in supporting our customers and growing those relationships,” said Monaghan.

    Green technologies

    Companies have been proactive in developing and releasing green and sustainable technologies.

    Sun Chemical recently launched a series of products under the WATERSOL line.

    “A group of self-emulsifying acrylic resins developed by DIC for automotive interiors, WATERSOL water-based resins deliver performance properties similar to solvent-based resins and demonstrate excellent corrosion resistance, high hardness, pigment dispersibility and low-temperature film formation properties,” Venturini said. 

    Additionally, the company launched WATERSOL WQS-364, a UV-curable water-based polymer for water-reducible coatings on plastics which contains a hydrophobic multi-functional methacrylate and urethane acrylate core surrounded by a hydrophilic group, Venturini noted. 

    “This unique technology brings both excellent package stability and a level of chemical and solvent resistance to the cured films not seen with other UV-curable systems,” he added.

    According to Arkema’s Dumain, the company is looking to translate its success in developing low-VOC solutions in architectural coatings into industrial and protective coatings.

    “We are continually exploring advances in high-performance waterborne technologies, which are closing in on solvent borne performance to the point of being competitive in many applications,” he said. “Additionally, we see greater potential for powder coatings and high solid solvent-borne coatings and are continuously working to develop new resins for those segments.”

    Arkema recently released ENCOR 2769 latex, a low minimum film forming temperature acrylic resin with formaldehyde-capture functionality; Synaqua E21047 alkyd emulsion, a new binder specifically for use in the formulation of high-quality trim paints and wood stains; and Synaqua E20856 alkyd emulsion, a new bio-based binder for low emission interior wall paints.

    SPI developed an acrylic polymer – RayCryl 1247 – “to help meet the market demand for accent colors but still achieve low VOC,” Monaghan said.

    “Our philosophy is not to just add renewable content to claim it’s ‘green,’ but the ingredients in our products must add functionality that provides performance advantages to customers,” Zagore said.

    “Solutions such as our new and unique acrylic/epoxy hybrid manufacturing platform allow us to bring products to market that are ultra-low to zero VOC while still maintaining high levels of performance,” Robinson said. “Joncryl OH 8314 is a waterborne direct-to-metal product that uses the acrylic/epoxy hybrid manufacturing platform. It is low VOC and maintains levels of performance equal to, or greater than, commercial solvent-borne products.”
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