New Opportunities for Architecture Coatings

According to the report from China National Coatings Industry Association after calculating the companies whose production value is over RMB5 million per year, the coatings output has reached  3.82 million tons in 2005, increased by 28.3% over 2004. The price soaring of energy and raw materials imposed great pressure to the industry. And some coatings producers began to think about different market strategy to keep their profit margin. Water borne products and new development of the applications are their hope in the near future.   

Wood Coatings Producers Are Testing Water Borne Products

The price lift of the organic polymers and solvent has compressed the profit of the coatings producers, which has sped up the "green" steps of some coatings varieties such as wood coatings and metal coatings, etc. Right now the wood coatings produced in China are mainly solvent based polyurethane and nitrocellulose varieties and less than 5% of the wood coatings market is water borne, but the large companies such as Huarun, Nippon Paint and Akzo Nobel, etc have all begun to produce some water borne wood coatings to meet the demand of the consumers. The price of the water borne acrylic and polyurethane latex, especially two components polyurethane latex used in wood coatings is still higher comparing with those solvent based varieties. Because the acrylic coatings are still having problem when used on wood, the acrylic water borne coatings is mainly used on simple wood furniture, fence or door. And the price advantage of the acrylic wood latex is attractive to the wood coatings producers comparing with water borne polyurethane latex. Some UV wood coatings and two components water borne polyurethane wood coatings are mainly used on some of the high end floor board and wood furniture in China.    Rohm and Haas, Bayer and BASF are the key and active players of water borne wood coatings latex in China.  Some wood coatings related standards are also being developed in China now, but these standards only concentrated on the technical and quality aspects of wood coatings. Until now, we haven't see any policy or standard issued by the government which can expand the water borne wood coatings market share very efficiently.

EIFS Market is Growing Rapidly in China

The architecture coatings market is forming a new trend right now, after the Ministry of Construction issued the policy of constructions energy saving and encouraging the use of dry mixed mortar to reduce city pollution. Some concrete and coatings producers constructed new dry mortar lines in two years to meet the fast growth of the EIFS (exterior insulation and finish systems) market in China, especially in northern China and Shanghai.    Some leading dry redispersible powder producers like Wacker are actively promoting their products in China. VAE (vinyl acetate-ethylene copolymer) redispersible powders from National Starch and Wacker are the main products for dry mixed mortar. Shanxi Sanwei Group is the representative of the domestic VAE powder producers. In July 2004 Sanwei announced that its 10 thousand t/a redispersible powder unit has put into operation and since then it has become the largest domestic player in the VAE powder market. Since 2005 Rohm and Haas has also been active in the dry mortar market of China and provided not only 100% acrylic and VAE redispersible powder but also 100% acrylic emulsion. According to the news released by Rohm and Haas in a show held in Beijing in 2006, less than 1% of the cement produced in China has used modified polymer, so the market potential is very big comparing with other countries. At this moment, Rohm and Haas has set up two emulsion production units and is the leading producer of high quality coatings emulsion in China. WACKER Group has inaugurated a spray drying facility for the production of VINNAPAS ( r) redispersible powders in China. The new facility, located in Zhangjiagang, Jiangsu province offers world-class technology and capacity. The new site’s investment costs, including all infrastructural measures, are estimated at EUR10 million.

Coil Coatings Market will Reshuffle

The growth step of the coil coatings market has slowed down since 2005, which is after two years of blowout growth.  The total coil coatings output is over the demand because the government has begun to control the steel industry.  The increasing capacity of the foreign companies in China has also increased the competition of the coil coatings market. The active players in China include Akzo Nobel, Nippon Paint, Valspar, Jiangsu Hongye, Becker, Redlion, Wuxi Litong, Shanghai Zhenhua, etc. But right now, Shanghai Zhenghua is still the largest coil coatings producer in China and the products have been provided not only to Shanghai Baosteel, which is the largest steel producer in China, but it also provided to some other steel producer like Masteel, etc.    The application market for coil steel is still mainly for construction materials, which holds around 50% of the total demand in China. The development of the coil coatings for electronic appliances as well as other applications like decoration, container, etc is not fast and the market is controlled by foreign producers in China. After the competition, especially in the coil coatings market for construction materials, the market will get tougher, some coil coatings producers who can not develop new products for other applications will be eliminated from the market soon, so reshuffling of the market will be inevitable, but on the other hand, steel export may help to alleviate the market tension.