Why is the coating industry in a dilemma? Is it because of the rise in raw materials?

Due to the increase in raw materials, the production cost of the coating industry has increased and the profit margin has decreased. It can be seen that the coating industry is extremely sensitive to the rise in raw materials. A few days ago, the international titanium dioxide giants Kemu, Tenuo, and Japan’s Ishihara collectively announced that they would raise the price of titanium dioxide products again from July 1. Although domestic companies have not made price adjustments, major companies have not announced price reductions; it ended in early June. With the falling TDI, Wanhua Chemical recently announced that it will increase WANNATE in North America and the Caribbean from June 15 onwards. For the price of TDI products, BASF announced that starting from June 19, it will increase the price of TDI products in North America; the price of MDI products has increased by more than 5% in the past two weeks; the news of the rise of these raw materials affects every The paint industry is the heart of people.
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With the fluctuation of raw material prices, the coatings industry will continue to be under cost pressure this year. Production capacity and prices will be affected by costs, and it seems that sales will be affected by prices. The status quo. But as far as the terminal is concerned, the coating market is indeed very severe this year, but the increase in raw material prices is not the main reason. Because price wars are still prevailing in the market, they are not affected by price increases at all, and the main reason for price wars is overcapacity.
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Some people in the industry said, “The overcapacity of coatings is now more than 50%, because the overcapacity leads to vicious low-price competition. The competition is so fierce, how can everyone not fight the price war?” Although his statement is more subjective inference, but From the data point of view, only from January to April 2017, the cumulative output of my country’s coatings has reached 5,961,500 tons, and the production capacity has increased by 2.6%.
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In fact, the demand for raw materials such as epoxy resin, titanium dioxide, acrylic acid, etc. is in line with the increase in coating output. To be precise, the coating industry has led the trend of raw materials to a certain extent. Increasing the tendency of raw materials to increase prices. The symbiotic relationship between the two within a certain range determines the relevance of interests, rather than inhibition. What’s more, the coating companies are much more affected by the limitations of the industry than they are affected by the price increase of raw materials.
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According to industry insiders, “because of the problems of financing difficulties, fewer projects, and pressure from environmental protection policies, today’s small and medium-sized paint companies have either closed down, or are on their way to bankruptcy.” Although the results are exaggerated, small and medium-sized paint companies The current situation is difficult but it is true. With regard to traditional coating products, high-end products need to be imported, and low-end products are becoming more homogenized, which is worrying about business operations; however, they are repeatedly struggling in terms of transformation and upgrading.
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Environmental protection is currently a major trend in the industry. In order to seek breakthroughs, many coating companies are turning to environmental protection, so water-based coatings, art coatingsEtc. has become an area where companies get together. However, due to the lack of sufficient funds and technical support, and no effective financing channels, small and medium-sized enterprises are either in financial difficulties due to forcibly supporting the research and development of water-based coatings, or in order to survive, they can only symbolically introduce the concept of water-based coatings. In the end, in the name of environmental protection, the main product is paint.
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In short, the rise in raw materials is not the main reason for the dilemma of the coatings industry. The coating industry is too dependent, slow in response, too passive, and too poor in creativity. You always need to chase hot spots (real estate, furniture) to prosper. Once the market of the objects you depend on declines, you will immediately languish, and this has nothing to do with whether the prices of raw materials rise or not.