Pigment market: A colourful picture
The onset and rapid spread of the coronavirus has had an impact on numerous industrial and developing countries, in some cases paralysing them. The pigment market has also been affected by the pandemic. However, it is already showing signs of recovery.
It is harder to provide a reliable overview of the pigment market for the past year than in the year previously. “The year 2020 was very varied. And the first six months is difficult to judge. The automotive industry was brought to its knees and the construction industry boomed, even exploded in some cases,” stresses Axel Schneider from C&G Pigment Europe. Several countries completely shut down. However, in Germany, the largest pigment consumer, development showed no signs of stopping.
Dr Andreas Zett from the Grolman Group also confirms the varying market development: “After a sharp decline in the pigment demand in May and June, the market has gradually recovered and is once again at more or less the normal level. However, specific pigments are seeing stronger demand.” According to Schneider, there was a problem in China during the first phase of the pandemic. As a result of the extended New Year holidays there were significant restrictions and production came under pressure. “It took some time for production to return to full capacity. This period lasted several weeks, with a dip until the end of March,” says Schneider, adding that there was then a wave that came from India.
Coloured pigments and effect pigments
In terms of the paints and coatings industry, it is difficult to determine reliable figures for this year and figures vary on the market size. Inorganic pigments dominate the coloured pigment market. Andreas Zett estimates the volume to be 1.75 million tonnes at a value of almost EUR 3.4 billion. Axel Schneider classifies the market to be slightly lower, although the figures are in a similar ballpark. In this case, iron oxide represents the largest group with a share of more than 85 %.
“What we’re seeing at the moment are the exploding freight costs from China. From Shanghai to Hamburg the costs were EUR 700–1,100 for a 20-foot container. Now we’re looking at over EUR 4,000 and the trend continues to rise.” What influence this has on material flows remains to be seen. “It is obvious that companies will revert to local suppliers. But there aren’t an unlimited number in this field, there are four producers in Europe,” Schneider points out.
Carbon black pigments
The market for carbon blacks is about 50,000 tonnes for paints and coatings (total market: 1 to 1.5 million tonnes). An additional requirement of 100,000 tonnes is used to manufacture printing inks and toners. Depending on the application, prices being charged for carbon blacks are between EUR 1.5 and 30 per kg. “The carbon black market has a lot in common with other pigments, however the main markets are generally in the automotive series and repair coatings and in industrial coatings such as marine or coil coatings,” says Alessandro Vulcano from the Aditya Birla Group. According to Vulcano, automotive series coatings initially suffered from declines of up to 70 %. More than 60 % of the demand is met by three companies: Orion, Cabot, and Birla.
Titanium dioxide
The TiO2 pigment demand for paints and coatings is quantified by Reg Adams from Artikol as being approx. 3.35 million tonnes at a value of EUR 8.4 billion (total market: 6 million tonnes). The average price for TiO2 pigment in Europe over 2020 was approximately EUR 2.50 per kg.
The outlook for 2021 remains very uncertain. “Assuming that the further spread of the coronavirus is successfully brought under control, particularly thanks to mass vaccination programmes, there should be a significant recovery of economic activity. This, in turn, should lead to a rise in the global demand for TiO2 compared with the previous year,” explains Adams.
Beyond China, no TiO2 pigment manufacturer is planning significant capacity changes, upwards or downwards. Within China, at least eight major TiO2 pigment projects have been announced according to Adams for completion in 2022/23, six of which by potential new entrants to the sector.
Catch-up effect expected
It remains to be seen whether there will be any further development in the pigment market. However, the prospects for this market remain positive for Andreas Zett: “We are expecting to see a marked catch-up effect during 2021. In spring, the infection numbers will drop and increasing numbers of people will be vaccinated. If we can return to a half-way normal everyday life, consumption will shoot up and will also then lead to increased demand for pigments.” This effect is currently being seen in China.
The short-term drop in demand and future recovery is connected to the development of major end-user industries, market research company Markets and Markets strongly believes. The leading applications for high-performance and special effect pigments are plastics and coatings, while smaller market shares are represented by printing inks, cosmetics, and textiles. The effects of Covid-19 are not uniformly distributed across or within these sectors. For instance, architectural coatings have seen a good development in the first half of 2020 as consumers spent their time on home renovations during the lockdown while demand for automotive paints dropped globally by about 25 %.
A more detailed version of this analysis of the pigment market can be found in European Coatings Journal 5/2021. The issue is available digitally at our online library 360°.
