Pigment Market Still Performing but Challenges May Impact in Tensity of Growth

By Cynthia Challener

The market-driven desires of the consumer have far reaching impact throughout the paint and coatings supply chain. In the automotive, electronic, household appliance, and other markets, product differentiation is being achieved through the introduction of more varied and intense colors, many of which offer multifunctional properties and/or special effects such as sparkle, luster, and color shifting. This key trend across so many industry sectors is driving the growth in demand for pigments in paints and coatings (as well as for inks, plastics, and other applications).

In the U.S., this growth has occurred in spite of several challenging market conditions, including rising raw material and energy prices, increasing competition from emerging regions, globalization, consolidation in both supplier and customer segments, and ever more comprehensive and strict regulatory requirements. Despite these challenges, innovation and the ability to provide improved customer service and support will enable established pigments suppliers to continue to experience positive growth into the future.

In 2005, the global sales volume of pigments used in paints and coatings was estimated to be 2.46 million metric tons, valued at $9.13 billion, according to Dan Murad, president and CEO of the ChemQuest Group, a consulting firm located in Cincinnati, OH. White pigments accounted for the largest volume of sales by far, at 83%, but only accounted for just over half of the dollar value ( 51.5%). Colored inorganic pigments were the second largest pigment type by volume (13.4% ), but only represented 9.9% of sales in dollars.

Colored organic pigments, which made up only 3% of the volume, accounted for over 38% of the dollar value of global pigment sales. Black pigments accounted for less than 1% of the volume and 0.5% of the chemical industry as a whole. The ability to push through some level of price increases should enable pigment manufacturers to recover a certain amount of costs derived from higher raw material and energy prices. Rising oil prices have impacted organic pigment producers the hardest because these compounds are synthesized from petrochemical-based raw materials. Metal prices have been rising as well, though.