Global Pigment Market
Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)
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Paints and coatings industry is the largest consumer of pigments and accounted for more than half of the global demand in 2018. Emerging new application areas for paints & coatings as building materials has been the key factor in pigments market growth. Urbanization has been the major enabler. Furthermore, modern printing industry demands use of high quality colours and pigments in printing inks for the colour efficacy. Printing inks account for around 50% of the global demand for organic pigments while plastics, paper and leather industries follow suit.
Pigments, pure or formulated, are a group of compounds used to impart colour when added to other materials. Colour of any pigment is determined based upon the absorption and reflection of specific wavelengths of light at the surface. Globally more than 10 million tons of pigments were produced in the year 2018. Titanium dioxide is the most widely used pigment and holds a major share in the inorganic pigments segment. Titanium dioxide (TiO2), iron oxide and carbon black are widely used inorganic pigments across the globe. TiO2 accounted for more than 65% of the total pigments demand in the year 2018. Apart from inorganic pigments, organic and specialty pigments are also the major categories in the market.
Asia Pacific is one of the largest producers and consumer of pigments. Over the last couple of decades, production of pigments has migrated to Asia Pacific region with China and India becoming the major producers. Companies are expecting good growth in decorative coatings as disposable income in emerging economies improves. This trend will be fueled by manufacturers complying with regulations especially in the production of lead chromate and VOCs. On the other hand, opportunities in North America and Europe region will be highlighted by demand for industrial coatings where high performance pigments are required to meet the standards.
Multinational companies no longer have patent protection for their high-value pigments resulting in migration of production bases to China. Over the past few years, there has been a downward trend in the production of pigments in North America, Europe and Japan resulting in restructuring and plant closures owing to lower margins. Furthermore, intense competition from Asia-based producers has forced manufacturers in the mature market to make strategic decisions for their pigment business thus, moving towards higher value and customer-oriented pigments.
Consumers Show Inclination towards Vibrant, Bright and Eco-friendly Colour Shades
Pigments are extensively used in production of paints and coatings for achieving desired level of colour and finish. Pigments also enable paints to safeguard the surfaces against corrosion and extreme weather conditions. Growing urbanization and infrastructure activities has created new avenues for paints & coatings, plastics and building materials. Demand for pigments is expected to grow significantly over the coming years with shift towards sustainable and eco-friendly products in mature markets such as Europe and North America.
Consumer preference towards vibrant, bright and eco-friendly colour shades has forced manufacturers to develop and innovate new chemistries. Furthermore, over the last few years the market has also observed upward trend in consumption of complex and specialty pigments for building products. Use of nanoparticles and nanotechnology are also expected to improve pigment performance. Very bright colours such as peacock feather and blue tarantula are created from nanostructures. Nanostructures are likely to create unique, dynamic effect while ensuring exceptional durability.
Pigments Industry Stuck in a Regulatory Conundrum
Rise in energy cost and raw material prices are the key challenges hampering the growth of pigment across all regions. Furthermore, over the last few years the pigment industry has been scrutinized by environmental and regulatory authorities for toxic pollutants. These regulations might result in plant of small non complying producers in Asia Pacific region. Pigment industry is heavily dependent on China for intermediaries and finished product. In the recent past, Chinese government has taken strict measures on polluters resulting substantial price rise in organic pigments. The major challenge today in pigment industry to achieve stability in supply of intermediaries and finished product.
Synergies and Expansion Strategies at the Forefront
In 2019, Tronox acquired TiO2 business of Crystal to become the world’s largest vertically integrated TiO2 manufacturer. Furthermore, INEOS acquired Crystal’s North American business from Tronox in the same year. The acquisition will help Tronox strengthen its foothold in other emerging and developed markets.
European pigment market is expected to go through restructuring over the coming years with BASF and Clariant looking to divest their pigment businesses. Stiff competition from Asia-based pigment manufacturers, especially from China and India has forced companies in developed economies to divest their lower margin pigment businesses. Companies in Europe will focus on high performance pigments, especially for automotive industry.
Companies are also launching new products to align their portfolio with changing consumer preferences, new legislations and environmentally efficient. Venator has launched pigments for boosting solar reflectance and ultra-low moisture applications for plastics industry. Croda launched an effect pigment to meeting the changing consumer preferences in the personal care industry.