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Pigments Market 2016

Pigments Market 20162017.02.13

Overall, pigment suppliers Coatings World interviewed reported growth, although some segments of the pigments marketed performed better than other.


BASF has reported that it continued to see the pigments market grow in 2016. “However, each market has different needs and trends that drive this growth. Design and styling options are vital for our automotive coatings customers. Our industrial coatings customers look more at durability and weathering. Being able to respond to these different needs is key to continue to see growth in the coatings market,” said Lisa Gentile, manager, global communications and branding colors & effects at BASF.

“Overall we have seen a stronger performance in the plastics market than in coatings for pigments,” said Robert Poemer, business unit leader at Heucotech, Ltd. “The plastics market has started to regain volumes that were lost in some areas a couple of years ago. Relative to coatings, the growth that we had previously seen in the automotive (both OEM and refinish) as well as the industrial segment was basically flat for 2016. It should be noted that both areas of the automotive market have shown significant growth over the last several years. After years of stagnation, the decorative market seemed to pick up in 2016 particularly in the NAFTA region. It would appear that housing starts and the resale market are fueling the increase.”

Frank Lavieri, executive vice president and general manager at Lansco Colors noted his company had a record year in 2016. “It looks like a trend toward lighter shades in coatings reduced pigment consumption somewhat, but growth through capturing new business more than compensated for this. Our international business was strong because of greater market penetration, but the U.S. may be the only market which is truly expanding,” he opined.

The 2016 pigment market was relatively flat with growth in the first half offset in the second half as the result of global political uncertainty, according to Charles Hoover of Cathy Industries.

“The Asia Pacific region showed some modest growth in domestic demand, but export driven coatings remained soft.”

According to Stephan Spiegelhauer, head of Global Competence Center Paint and Coatings, Inorganic Pigments Business Unit, Lanxess, the global market for iron oxide pigments is growing continuously. “This development is mainly driven by the trend toward urbanization,” he noted. “The colorful and also functional design of urban environments is becoming an ever more important priority for town planners, architects and building developers. The robust state of the construction sector in Asia and North America is also contributing to this positive development. All the same, the rate of growth differs from region to region and according to the area of application.”

“Alongside weakened but sustained growth in Asia, we are seeing substantial gains in North America. Growth in industrial and architectural pigments is evenly spread, as far as we observe. In general, we are noticing a trend toward greater differentiation in our customers’ end products, leading to broader demands on pigments in terms of colors and properties,” said Spiegelhauer.

“The organic pigments market performance is basically in line with the development of the various coatings market segments plus additional effects like color trend and replacement of lead chromates mainly in emerging markets,” said Jens Reininger, head of strategic marketing, Clariant Plastics & Coatings.

Reininger continued, “Consumption of pigments in automotive OEM and industrial coatings strongly correlates to regional GDP growth rates. In decorative coatings, we expect an above-average pigments volume growth in emerging regions like China and India with currently still low consumption of paints in relation to the number of occupants, and respectively in comparison to traditional markets in Europe and North America. As discussed, replacement of lead chromates has an additional positive effect on organic pigments volume growth in these regions. In Europe we expect a low volume growth of paint and pigment consumption. A more or less constant value of the pigment market is the result of decreasing price developments besides overall volume increase.”

Emerging markets continue to offer the best opportunity for growth in the pigment market. “As in previous years we see the opportunity for growth in Asia and Eastern Europe,” said Poemer. “In previous years, Latin America has also provided opportunities but with the current economic situation in Brazil, the largest market in Latin America, the opportunities have been significantly reduced. There is a specific trend to high performing pigment solutions spreading from the mature markets also in the areas of Asia and Africa.”

Over the past decade, the pigments market has continued to become more competitive and challenging. “Our customers demand that we act quickly to respond to their needs,” Gentile noted. “And at the same time, we know we need to be bringing innovative products to the market and anticipating future trends. All of this requires close collaboration with our customers to ensure we’re making the right decisions together. We’ve also observed a growing demand for individual design, especially in automotive coatings. There is a strong need for differentiation and the right effect pigments can help our customers be successful in this area.”

Environmental issues are of paramount importance to pigment suppliers to the coatings the industry. “Compliance issues remain the major challenge for the whole chemical industry, including pigments,” said Hoover. “New tougher environmental standards in China have effected global commodity pricing on many items and will put pressure on prices in 2017. To compensate for raising raw material costs many companies are bringing processes, that have traditionally been outsourced, back in-house.”

One of the major influences for the pigments market is REACH legislation. “This legislation will obviously impact the situation in Europe but will also have an impact around the world due to the global market,” said Poemer. “The upcoming last step of REACH will be a challenge for smaller suppliers who may not have the necessary resources to provide compliant materials.

We are starting to see some shortages in raw materials and subsequently some increased pricing. The increasing raw material prices will also have an influence on pigment pricing and after nearly years of price reduction the trend will most likely go up.”

As with other industries, globalization trends are impacting pigments producers. “The leading paint and coating manufacturers have become increasingly international in their activities ever since the onset of market globalization,” said Spiegelhauer. “Consequently, pigment suppliers are now expected to grow worldwide along with them, and to make pigments of consistent quality available everywhere in the world. Lanxess benefits from a demand shift towards high-end and environmentally friendly products accessible globally in the same quality.”

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