China's Coatings Market to Grow 3% in 2024! Profits Up 5%!

Recently, at the 2024 China Coatings Industry Information Annual Conference and the 12th China Coatings Technology Innovation Summit Forum, Liu Jie, Secretary-General of the China Coatings Industry Association (CCIA), released an analysis report on the development overview of the coatings industry for the first three quarters of 2024. The CCIA's forecast indicates that the Chinese coatings market will gradually stabilize in 2024, with an expected production growth rate of approximately 3%, while profit growth is anticipated to maintain around 5%.

According to data released by the CCIA, the overall development of China's coatings industry in the first three quarters of 2024 shows a trend of stable growth. From January to September, the total production of coatings reached 26.398 million tons, remaining flat compared to the same period last year; main business revenue was 298.27 billion yuan, a year-on-year increase of 0.6%; and total profit was 19.33 billion yuan, a year-on-year increase of 3.1%. In terms of exports, China's coatings export volume in the first three quarters was 244,700 tons, up 27.80% year-on-year; the export value was $774 million, an increase of 16.34%; the import volume was 120,700 tons, up 11.00%; and the import value was $1.33 billion, an increase of 14.23%.

From the perspective of main business operations, the growth rate of coatings production showed a slight decline overall in the first three quarters, with a slight increase expected in the first half of the fourth quarter; the main business growth rate remained stable in the second and third quarters, with a rebound at the end of the third quarter; however, total profits showed a significant decline. In key downstream industries of the coatings sector, industries such as shipbuilding, container manufacturing, photovoltaics, engineering machinery (loading types), and furniture manufacturing have seen rapid growth; while the real estate sector continues to decline, the rate of decline has narrowed; growth in sub-sectors of coatings is mainly concentrated in industrial applications.

Liu Jie pointed out that based on the industry’s raw material procurement index, overall raw material prices showed a downward trend in the third quarter, alleviating cost pressures, but finished coatings prices significantly dropped, reflecting the intensity of competition in the industry. Overall analysis indicates that the main reason for the industry's sluggish growth is insufficient demand, while the primary cause of declining profits is severe internal competition, especially in sub-sectors such as architectural decorative coatings and general anti-corrosion products, which occupy a significant share. Liu Jie emphasized that the coatings industry should maintain confidence in market prospects. The macroeconomic policies launched by the state, which are strong and sustainable, will stabilize the coatings industry's supply chain, and equipment upgrades and consumer goods replacement policies will significantly impact industrial protection, equipment, machinery, automotive, shipbuilding, electronics, home appliances, and construction decoration sectors, thus benefiting corresponding sub-industries in coatings.

Regarding the development trends of China's coatings industry in 2024, Liu Jie noted that low carbon and environmental protection remain key directions for the future development of the coatings and pigments industry. It is expected that the export volume of coatings will maintain a growth rate of around 10%, focusing on functional coatings products. The CCIA predicts that the overall production growth rate for the industry will remain approximately 3%, with main business revenue expected to recover to a growth rate of about 2% in the later part of the year. In terms of profits, due to upstream raw material prices remaining low, an average growth rate of about 5% is still anticipated. In terms of raw material exports, the overall export volume of titanium dioxide will be limited due to international anti-dumping investigations, leading to a decline in export prices; however, iron oxide pigments are expected to see a slight rebound in export volume in the fourth quarter, with prices remaining stable.