"In China, there is going to be a slowdown in housing starts and commercial builds, but we still see a strong uplift for higher quality paint," says Mark Henning, president and CEO of Angus Chemical (Hoffman Estates, IL).
Angus is Dow's
former nitroalkanes business and a major ingredients supplier to the coatings industry.
As the Chinese economy shifts to a more consumer-driven market, the importance of quality will become more pronounced.
"Even in a slower-growth economy, we are seeing the consumer-driven portion becoming much larger," Henning
"For those materials that are more specialty ... if there is a supply-demand imbalance, when demand goes up prices will firm," Henning
Paint companies are expecting downward pressure on prices for commodity ingredients, but prices for other ingredients may increase, he
"Even with stable pricing, paint makers know how volatile that market can be," Henning
Recent consolidation among TiO2 producers, with big producers, such as Huntsman and Cristal, acquiring larger shares of the market, also means that paint makers are keen to cut their reliance on TiO2 regardless of current prices.
Ingredient efficiency overall is an important driver of paint reformulations and new product development.
Paint makers are interested in cutting costs and boosting performance by optimizing their use of TiO2
, resins and other components, industry executives say.
"Anything you can do to optimize ingredients, [paint makers] will always be interested," Henning
"A general trend in low-VOC is that the film isn't as hard and it plasticizes more, so you get more blocking," Henning