Affected by the coronavirus, the pigment market is expected to recover

A new study by UK, LEATHERHEAD/Ohio, AKRON – Smithers predicts that the global demand for high-performance and special-effect pigments will be 217,100 tons in 2020, valued at 6.22 billion US dollars, because the industry will be affected by the global coronavirus epidemic Respond to the severe decline in short-term demand caused.

The latest research in the Smithers market report "The Future of High-Performance Pigments by 2025" shows that the value of 2020 is 12% lower than that of 2019. This is the result of the COVID-19 pandemic that has restricted economic activities and closed industries around the world, affecting almost all end users.

Smithers predicts that the industry will gradually recover in the first five years of the next decade. According to this study, the market is expected to recover by 5% in 2021; however, demand will not return to 2019 levels until 2023 or 2024. Responding to short-term shocks and adapting to the coronavirus era, it is estimated that by 2025, consumption will reach 255,770 tons, worth US$7.58 billion.

Smithers' research conducted expert qualitative and quantitative analysis on the market prospects of 16 different organic, inorganic and special effect pigments. The report shows that pearlescent, aluminum and copper metal products still have the largest market shares. By weight, they together accounted for 59% of the market share in 2019. The decline in 2019-2020 will affect all pigment categories, but is most noticeable in the field of special effect pigments.

The short-term decline in demand and the future recovery will be linked to the fate of major end-use industries. The main use of high-performance and special-effect pigments is plastics and coatings, with a smaller share used in inks, cosmetics and textiles. The impact of COVID-19 on these industries is not consistent. For example, decorative coatings performed well in the first half of 2020, because quarantined consumers spend their time on home decoration; on the contrary, the global demand for automotive coatings has dropped by about 25%.

As high-performance pigment suppliers move forward in this new business environment, they will need to respond to multiple business and evolving technical requirements. These needs include dealing with the impact of major mergers and acquisitions on the industry, such as DIC's acquisition of BASF's pigment division, and Clariant's sale of its masterbatch business to PolyOne to create a new company, Avient. Further industry consolidation is likely to occur in the future.

Another problem that the industry will face is that as China's high-performance pigment suppliers are becoming more mature, they should also consider the current continuous demand for high-chroma pigments, so that customers have better color choices.

Other technologies that companies need to consider are increasing the grade of pigments to accelerate the transition from traditional grinding to high-speed mixing. Another factor is to achieve greater portfolio diversification by integrating cutting-edge nanopigments and smart pigment innovations. Companies must also consider introducing renewable or bio-based high-performance pigments to meet end-user needs for more sustainable solutions that reduce their carbon footprint.