Arnold Wang, China Correspondent02.12.21
The market size for powder coatings is projected to grow from $11.6 billion in 2020 to $14.9 billion by 2025, at a CAGR of 5.2 percent, according to MarketsandMarkets.
Strong Growth in APAC Region
Strong growth can be witnessed in the powder coatings market in the APAC region, especially in China, India, and South-East Asian countries, MarketsandMarkets said in its report “Powder Coatings Market by Resin Type (Thermoset and Thermoplastic), Coating Method (Electrostatic Spray, Fluidized Bed), End-Use Industry (Appliances, Automotive, General Industrial, Architectural, Furniture), and Region - Global Forecast to 2025.”
APAC is currently the fastest-growing and the largest market for powder coatings, the research firm said.
With economic contraction and saturation in European and North American markets, the demand is shifting to the APAC region, MarketsandMarkets noted.
Countries such as India, China, and Indonesia are also investing heavily in various end-use industries, which is likely to influence the growth of the powder coatings market in these countries, per MarketsandMarkets.
Based on the information released by the China Powder Coatings & Painting Exhibition, in 2019 thermoset powder coatings’ output is 1.92 million tons – an increase of more than nine percent from 2018. The total powder coatings’ output is 2.1 million tons.
The architectural segment has around a 30 percent share of the total thermoset powder coatings market, followed by normal industrial applications and home electronic appliances.
The average selling price for powder coatings produced by international companies is 22 thousand yuan per ton.
The Yangze River Delta is still the largest production base for powder coatings, followed by the Pearl River Delta.
Many large machinery and vehicle producers including Sanyi, China International Marine Container Ltd’s Vehicle branch, Xugong, Dingli Machinery, etc., switched their solvent coatings to powder-based varieties.
The outlook of the domestic infrastructure market is positive, offering growth potential to engineering machinery.
And the trend changing solvent coatings to powder coatings has offered many opportunities for powder coatings.
COVID-19 Causes Disruption
However, COVID-19 has disrupted the production of raw materials used in paints and coatings manufacturing, MarketsandMarkets reported.
Asian countries such as India, China, Japan, Singapore, and Thailand are the hubs for paints and coatings manufacturing and are major suppliers of these raw materials, per MarketsandMarkets.
For instance, China is one of the major suppliers of resins and exports a million tons of resins in the global market, the research firm noted.
Innovation, new applications will drive future growth
The wheel is still the largest market for powder coatings in vehicles.
But powder coatings producers are also developing more applications for powder coatings.
Powder coatings are used for coating automotive engines, chassis, wheels, filters, joysticks, mirrors, wipers, horns, and other parts of vehicles, according to MarketsandMarkets.
Transparent powder coating is being developed as a varnish for car bodies, MarketsandMarkets said.
Zhejiang Guanghua said the operation rate of its capacity has increased from 107 percent in 2017 to 138 percent in 2019.
Zhejiang Guanghua, whose total capacity is only behind Shenjian, plans to invest 430 million yuan to add 120,000 tons per year to its existing 99,000 tons per year soon.
Zhejiang Guanghua thinks the automotive market has more potential for powder coatings, so it developed two technologies including one polyester resin with low curing temperature and one polyester resin modified by graphene to target the applications on chassis, engine, and varnishes as well as interior decorations, etc.
In 2020 the automotive industry produced 25 million vehicles – down two percent from 2019.
But commercial automotive including bus and truck increased by 20 percent, offsetting the 6.5 percent decrease from passenger cars.
MarketandMarkets said investments in the automotive industry in China provide high growth opportunities to powder coating manufacturers, as it is one of the main applications of this coating.
Different government policies and standards pointed out that powder coatings should be classified into low VOC coatings products and production with powder coatings may not need to be stopped when air pollution is heavy.
This pushes forward the development of the powder coatings industry in China and encourages more investments to get into this sector.
The powder coating industry faces many environmental challenges with the increasing focus on meeting state and local regulations regarding wastewater discharge, MarketsandMarkets said.
Jingaoli Group will invest 1.16 billion yuan to build a new production base that can produce 30,000 tons per year of polyester resin and 10,000 tons per year of powder coatings in Shandong province.
Jingaoli is the largest PVDF coatings producer in China and its powder coatings products focus on aluminum profile.
Like other industries, the powder coatings industry is also going through the consolidation process.
According to some media reports, 57 powder coatings companies in the Yangzhou, Jiangsu province are consolidated into three companies.
Local governments know that without consolidation these small companies, mainly family-owned ones, will not survive under fierce competition and have low standards for environmental and safety management, so the governments are initiating the change.
Market Players
Twenty-three of the top 30 powder coatings companies are domestic companies.
The remaining seven international companies are AkzoNobel, Tiger, Nippon, Sherwin Williams, Axalta, PPG and Jotun.
It is estimated that the products of domestic companies can hold an 85 percent market share.
The total revenue of the top 30 holds around a 31 percent share of the total powder coatings market.
Steady economic growth is bringing more investments to the APAC region, according to MarketsandMarkets.
Over the past decade, investments by steel companies have pushed the development of appliances, construction, automotive, and electronics sectors in the developing countries of APAC and the Middle East, per MarketsandMarkets.
In May 2019, Axalta announced a new growth strategy for its China powder coatings business.
The new strategy positions the company to more effectively unlock value in the high-end Chinese powder coatings market in the next three years.
Axalta said it will focus on developing the high-end powder coating market, introducing new product lines and service models.
The company planned to relaunch its flagship brands, Alesta, Abcite and NapGard with new Chinese names and unveil new brands: Plascoat, Wireguard and Talisman.
“China is one of the largest markets in the global powder coatings industry and continues to grow,” said Rajeev Rao, Industrial Coatings VP of Axalta Global Powder and Business Development and Strategy.
Strong Growth in APAC Region
Strong growth can be witnessed in the powder coatings market in the APAC region, especially in China, India, and South-East Asian countries, MarketsandMarkets said in its report “Powder Coatings Market by Resin Type (Thermoset and Thermoplastic), Coating Method (Electrostatic Spray, Fluidized Bed), End-Use Industry (Appliances, Automotive, General Industrial, Architectural, Furniture), and Region - Global Forecast to 2025.”
APAC is currently the fastest-growing and the largest market for powder coatings, the research firm said.
With economic contraction and saturation in European and North American markets, the demand is shifting to the APAC region, MarketsandMarkets noted.
Countries such as India, China, and Indonesia are also investing heavily in various end-use industries, which is likely to influence the growth of the powder coatings market in these countries, per MarketsandMarkets.
Based on the information released by the China Powder Coatings & Painting Exhibition, in 2019 thermoset powder coatings’ output is 1.92 million tons – an increase of more than nine percent from 2018. The total powder coatings’ output is 2.1 million tons.
The architectural segment has around a 30 percent share of the total thermoset powder coatings market, followed by normal industrial applications and home electronic appliances.
The average selling price for powder coatings produced by international companies is 22 thousand yuan per ton.
The Yangze River Delta is still the largest production base for powder coatings, followed by the Pearl River Delta.
Many large machinery and vehicle producers including Sanyi, China International Marine Container Ltd’s Vehicle branch, Xugong, Dingli Machinery, etc., switched their solvent coatings to powder-based varieties.
The outlook of the domestic infrastructure market is positive, offering growth potential to engineering machinery.
And the trend changing solvent coatings to powder coatings has offered many opportunities for powder coatings.
COVID-19 Causes Disruption
However, COVID-19 has disrupted the production of raw materials used in paints and coatings manufacturing, MarketsandMarkets reported.
Asian countries such as India, China, Japan, Singapore, and Thailand are the hubs for paints and coatings manufacturing and are major suppliers of these raw materials, per MarketsandMarkets.
For instance, China is one of the major suppliers of resins and exports a million tons of resins in the global market, the research firm noted.
Innovation, new applications will drive future growth
The wheel is still the largest market for powder coatings in vehicles.
But powder coatings producers are also developing more applications for powder coatings.
Powder coatings are used for coating automotive engines, chassis, wheels, filters, joysticks, mirrors, wipers, horns, and other parts of vehicles, according to MarketsandMarkets.
Transparent powder coating is being developed as a varnish for car bodies, MarketsandMarkets said.
Zhejiang Guanghua said the operation rate of its capacity has increased from 107 percent in 2017 to 138 percent in 2019.
Zhejiang Guanghua, whose total capacity is only behind Shenjian, plans to invest 430 million yuan to add 120,000 tons per year to its existing 99,000 tons per year soon.
Zhejiang Guanghua thinks the automotive market has more potential for powder coatings, so it developed two technologies including one polyester resin with low curing temperature and one polyester resin modified by graphene to target the applications on chassis, engine, and varnishes as well as interior decorations, etc.
In 2020 the automotive industry produced 25 million vehicles – down two percent from 2019.
But commercial automotive including bus and truck increased by 20 percent, offsetting the 6.5 percent decrease from passenger cars.
MarketandMarkets said investments in the automotive industry in China provide high growth opportunities to powder coating manufacturers, as it is one of the main applications of this coating.
Different government policies and standards pointed out that powder coatings should be classified into low VOC coatings products and production with powder coatings may not need to be stopped when air pollution is heavy.
This pushes forward the development of the powder coatings industry in China and encourages more investments to get into this sector.
The powder coating industry faces many environmental challenges with the increasing focus on meeting state and local regulations regarding wastewater discharge, MarketsandMarkets said.
Jingaoli Group will invest 1.16 billion yuan to build a new production base that can produce 30,000 tons per year of polyester resin and 10,000 tons per year of powder coatings in Shandong province.
Jingaoli is the largest PVDF coatings producer in China and its powder coatings products focus on aluminum profile.
Like other industries, the powder coatings industry is also going through the consolidation process.
According to some media reports, 57 powder coatings companies in the Yangzhou, Jiangsu province are consolidated into three companies.
Local governments know that without consolidation these small companies, mainly family-owned ones, will not survive under fierce competition and have low standards for environmental and safety management, so the governments are initiating the change.
Market Players
Twenty-three of the top 30 powder coatings companies are domestic companies.
The remaining seven international companies are AkzoNobel, Tiger, Nippon, Sherwin Williams, Axalta, PPG and Jotun.
It is estimated that the products of domestic companies can hold an 85 percent market share.
The total revenue of the top 30 holds around a 31 percent share of the total powder coatings market.
Steady economic growth is bringing more investments to the APAC region, according to MarketsandMarkets.
Over the past decade, investments by steel companies have pushed the development of appliances, construction, automotive, and electronics sectors in the developing countries of APAC and the Middle East, per MarketsandMarkets.
In May 2019, Axalta announced a new growth strategy for its China powder coatings business.
The new strategy positions the company to more effectively unlock value in the high-end Chinese powder coatings market in the next three years.
Axalta said it will focus on developing the high-end powder coating market, introducing new product lines and service models.
The company planned to relaunch its flagship brands, Alesta, Abcite and NapGard with new Chinese names and unveil new brands: Plascoat, Wireguard and Talisman.
“China is one of the largest markets in the global powder coatings industry and continues to grow,” said Rajeev Rao, Industrial Coatings VP of Axalta Global Powder and Business Development and Strategy.
