Market Conditions are a Hot Topic

n September, I attended three in-person conferences, and prominent points of discussion at each of them were coatings market conditions and the global supply chain crisis. Dan Murad, CEO of The ChemQuest Group, gave a very detailed keynote address at Coatings Trends and Technologies (CTT) on strategic insights for business planning, where he addressed these issues in depth.

Dan was also interviewed during Fermium Research’s 22nd annual Paints, Coatings & Adhesives conference call. Fermium Research, an independent chemicals equity research firm, publishes a yearly paints primer, and includes information gathered during this annual call. The company’s September 2021 report is titled, Paints, Coatings, Adhesives: Raws Near-Term Headwind; Demand Long-Term Tailwind. This 40-page report provides an overview of market conditions and forecasts with valuable insights into growth drivers, raw material implications, industry consolidation and all things related to paints, coatings and adhesives. Following is a short excerpt from Fermium about their report:

“ChemQuest CEO Dan Murad provided insights into the ~$155B coatings industry (down from ~$164B in 2019), including an overview of market conditions and forecasts. To our ears, Dan's comments appear to be more favorable for the raw materials producers in the near term including TROX (TiO₂), OLN (epoxy), CE (VAM), and HUN (MDI). The havoc being wreaked by the scarcity of raws/logistics issues is undoubtedly pressuring the coatings companies. However, PPG and SHW should benefit from the reversion from DIY to Pro (the opposite for MAS). And while the price/raws balance will continue to be a 3Q squeeze, there should be margin recovery toward year-end and into 2022 benefiting these and RPM.

“Underlying demand trends are positive, with such end-markets as auto and aerospace poised to outpace next year. Overall U.S. coatings volumes are still below the 2005 peak. Following the pandemic-challenged 2020 with sales down 2% including volumes down 1%, 2021 is forecast to see an overall sales increase of 7%. The categories showing faster growth are those showing a greater decline in 2020; Special Purpose is expected to increase 11% (vol +8.3%, price +2.3%), 9% for OEM Coatings (vol +6.8%, price +1.8%), and 5% for Architectural Coatings (vol +2.5%, price +2.3%). CQ highlighted such major trends as products that create operational efficiencies, increase sustainability, and provide innovation.”

I attended Fermium Research’s presentation at the Smithers Pigment and Color Science Forum & TiO₂ World Summit in Cleveland the week after hearing Dan speak at CTT. The company’s Vice President and Co-Founder, Aziza Gazieva, gave a Wall Street Overview for TiO₂, detailing some of the macro factors that impact their coverage. She also discussed the TiO₂ landscape, and explained the financials and characteristics of the market’s key players, as well as their expectations of market dynamics factoring in feedstock and TiO₂ supply and demand.

If these are areas of interest to you, I highly recommend you watch Dan’s keynote address and reach out to Fermium Research for more information about their Paint report and TiO₂ outlook.

The global supply chain crisis has been another hot topic of discussion at industry events, and in the news in general. This month we decided to address these challenges with two articles in our FOCUS ON DISTRIBUTORS section. The first is an interview with Randy Griffin, Director, Operations, at Lintech International, LLC. And the second shows key takeaways of a recent membership poll conducted by the National Association of Chemical Distributors. PCI will be sure to update our readers on the supply chain issues as we gather more information.

I hope you enjoy this October issue. In addition to focusing on distribution, we feature articles on pigment technology, formulating resins at high solids levels, scratch-resistant coatings for the professional and DIY sector, and much more!

n September, I attended three in-person conferences, and prominent points of discussion at each of them were coatings market conditions and the global supply chain crisis. Dan Murad, CEO of The ChemQuest Group, gave a very detailed keynote address at Coatings Trends and Technologies (CTT) on strategic insights for business planning, where he addressed these issues in depth.

Dan was also interviewed during Fermium Research’s 22nd annual Paints, Coatings & Adhesives conference call. Fermium Research, an independent chemicals equity research firm, publishes a yearly paints primer, and includes information gathered during this annual call. The company’s September 2021 report is titled, Paints, Coatings, Adhesives: Raws Near-Term Headwind; Demand Long-Term Tailwind. This 40-page report provides an overview of market conditions and forecasts with valuable insights into growth drivers, raw material implications, industry consolidation and all things related to paints, coatings and adhesives. Following is a short excerpt from Fermium about their report:

“ChemQuest CEO Dan Murad provided insights into the ~$155B coatings industry (down from ~$164B in 2019), including an overview of market conditions and forecasts. To our ears, Dan's comments appear to be more favorable for the raw materials producers in the near term including TROX (TiO₂), OLN (epoxy), CE (VAM), and HUN (MDI). The havoc being wreaked by the scarcity of raws/logistics issues is undoubtedly pressuring the coatings companies. However, PPG and SHW should benefit from the reversion from DIY to Pro (the opposite for MAS). And while the price/raws balance will continue to be a 3Q squeeze, there should be margin recovery toward year-end and into 2022 benefiting these and RPM.

“Underlying demand trends are positive, with such end-markets as auto and aerospace poised to outpace next year. Overall U.S. coatings volumes are still below the 2005 peak. Following the pandemic-challenged 2020 with sales down 2% including volumes down 1%, 2021 is forecast to see an overall sales increase of 7%. The categories showing faster growth are those showing a greater decline in 2020; Special Purpose is expected to increase 11% (vol +8.3%, price +2.3%), 9% for OEM Coatings (vol +6.8%, price +1.8%), and 5% for Architectural Coatings (vol +2.5%, price +2.3%). CQ highlighted such major trends as products that create operational efficiencies, increase sustainability, and provide innovation.”

I attended Fermium Research’s presentation at the Smithers Pigment and Color Science Forum & TiO₂ World Summit in Cleveland the week after hearing Dan speak at CTT. The company’s Vice President and Co-Founder, Aziza Gazieva, gave a Wall Street Overview for TiO₂, detailing some of the macro factors that impact their coverage. She also discussed the TiO₂ landscape, and explained the financials and characteristics of the market’s key players, as well as their expectations of market dynamics factoring in feedstock and TiO₂ supply and demand.

If these are areas of interest to you, I highly recommend you watch Dan’s keynote address and reach out to Fermium Research for more information about their Paint report and TiO₂ outlook.

The global supply chain crisis has been another hot topic of discussion at industry events, and in the news in general. This month we decided to address these challenges with two articles in our FOCUS ON DISTRIBUTORS section. The first is an interview with Randy Griffin, Director, Operations, at Lintech International, LLC. And the second shows key takeaways of a recent membership poll conducted by the National Association of Chemical Distributors. PCI will be sure to update our readers on the supply chain issues as we gather more information.

I hope you enjoy this October issue. In addition to focusing on distribution, we feature articles on pigment technology, formulating resins at high solids levels, scratch-resistant coatings for the professional and DIY sector, and much more!

n September, I attended three in-person conferences, and prominent points of discussion at each of them were coatings market conditions and the global supply chain crisis. Dan Murad, CEO of The ChemQuest Group, gave a very detailed keynote address at Coatings Trends and Technologies (CTT) on strategic insights for business planning, where he addressed these issues in depth.

Dan was also interviewed during Fermium Research’s 22nd annual Paints, Coatings & Adhesives conference call. Fermium Research, an independent chemicals equity research firm, publishes a yearly paints primer, and includes information gathered during this annual call. The company’s September 2021 report is titled, Paints, Coatings, Adhesives: Raws Near-Term Headwind; Demand Long-Term Tailwind. This 40-page report provides an overview of market conditions and forecasts with valuable insights into growth drivers, raw material implications, industry consolidation and all things related to paints, coatings and adhesives. Following is a short excerpt from Fermium about their report:

“ChemQuest CEO Dan Murad provided insights into the ~$155B coatings industry (down from ~$164B in 2019), including an overview of market conditions and forecasts. To our ears, Dan's comments appear to be more favorable for the raw materials producers in the near term including TROX (TiO₂), OLN (epoxy), CE (VAM), and HUN (MDI). The havoc being wreaked by the scarcity of raws/logistics issues is undoubtedly pressuring the coatings companies. However, PPG and SHW should benefit from the reversion from DIY to Pro (the opposite for MAS). And while the price/raws balance will continue to be a 3Q squeeze, there should be margin recovery toward year-end and into 2022 benefiting these and RPM.

“Underlying demand trends are positive, with such end-markets as auto and aerospace poised to outpace next year. Overall U.S. coatings volumes are still below the 2005 peak. Following the pandemic-challenged 2020 with sales down 2% including volumes down 1%, 2021 is forecast to see an overall sales increase of 7%. The categories showing faster growth are those showing a greater decline in 2020; Special Purpose is expected to increase 11% (vol +8.3%, price +2.3%), 9% for OEM Coatings (vol +6.8%, price +1.8%), and 5% for Architectural Coatings (vol +2.5%, price +2.3%). CQ highlighted such major trends as products that create operational efficiencies, increase sustainability, and provide innovation.”

I attended Fermium Research’s presentation at the Smithers Pigment and Color Science Forum & TiO₂ World Summit in Cleveland the week after hearing Dan speak at CTT. The company’s Vice President and Co-Founder, Aziza Gazieva, gave a Wall Street Overview for TiO₂, detailing some of the macro factors that impact their coverage. She also discussed the TiO₂ landscape, and explained the financials and characteristics of the market’s key players, as well as their expectations of market dynamics factoring in feedstock and TiO₂ supply and demand.

If these are areas of interest to you, I highly recommend you watch Dan’s keynote address and reach out to Fermium Research for more information about their Paint report and TiO₂ outlook.

The global supply chain crisis has been another hot topic of discussion at industry events, and in the news in general. This month we decided to address these challenges with two articles in our FOCUS ON DISTRIBUTORS section. The first is an interview with Randy Griffin, Director, Operations, at Lintech International, LLC. And the second shows key takeaways of a recent membership poll conducted by the National Association of Chemical Distributors. PCI will be sure to update our readers on the supply chain issues as we gather more information.

I hope you enjoy this October issue. In addition to focusing on distribution, we feature articles on pigment technology, formulating resins at high solids levels, scratch-resistant coatings for the professional and DIY sector, and much more!