Between the end of 2020 and the beginning of 2021, the coating industry and particularly the wood coatings industry, exposed to the world of polyurethane resins, has been facing an incredible price increase in a number of necessary and irreplaceable raw materials.
Is this a “black swan”, i.e. an unpredictable event such as an earthquake or a particularly aggressive and widespread pandemic?
Let us look at some aspects that are useful for a “rational” explanation:
1. In November and December, we had the rise of isocyanate resins’ prices, a very oligopolistic market, with only few TDI and HDI producers.
2. Solvents increased rapidly: +60% propylene glycol, +40% acetate solvents, +60% ethyl acetate solvents, many others between +25% and 75% in three months.
3. Several force majeure announcements have occurred in recent weeks: in particular, the interruption of n-butanol production has led to shortages of butylacrylate and butylacetate. The impact on acrylic resins for water- and solvent-based products is in the order of 8%.
4. Due to the BPA (Bisphenol A) dust explosion and fire in China and South Korea respectively, epoxy resins increased by 52% in two months (see ISIS data).
5. Polyester resins increased by 15-20% due to the increase of Neopentylglycol, adipic acid and isophthalic acid.
6. Aromatic solvents will follow the trend of oil, which now seems to be on the rise at least until September.
7. Long-haul transport from the Far East has seen increases of 130%.
Meanwhile other “major forces” have been declared. Maleic and TMP are hard to come by, solvents such as ketones are experiencing very, very variable quotations, but tending upwards and seeming out of control.
Paint manufacturers have been quick to alert their customers to the situation, trying to mediate the irregularity of the increases in the various substances with prices that cover the additional costs in this first part of the year. It is very difficult at this stage to know what will happen in the medium to long term: much will depend on the development of the economy and thus on the Covid pandemic. If consumption picks up significantly, it is to be hoped that some clearly speculative aspects of the current situation can be reversed.
Our information system is adequate to follow the positions of products and customers in detail, so we have equipped ourselves to ask for adequate prices without penalising our market.
In short, we hope that the vaccine will also calm this further instability.
– Eng. Andrea Moltrasio, CEO ICRO
