Raw Material Prices Reaching New Highs
The prices of raw materials used to make paint and coatings are still skyrocketing, with the upward trajectory set to continue over the next few months.
We wrote a blog article about the raw material price hikes facing paint manufacturers way back in March 2021. During that time, price hikes were causing severe disruption throughout the industry, with key raw materials such as solvents facing steep increases (for example acetone 123%, n-butyl acetate 91%, n-butanol 54% and so on).
Fast forward a year, and raw material prices are still not abating, causing major headaches for paint and coatings manufacturers. In fact, the latest figures for December 2021 show prices ended the year 18% higher according to the ONS index of input prices for paints and coatings.
It’s important to note that in June 2021 prices were 10% higher. However, by the end of the year this had surged by almost 50% making it the fastest increase since the second half of 2008.
Recent Price Figures on Paint and Coatings
Paint and coatings are mixtures of different ingredients. Therefore, the industry is extremely dependent on a large number of raw materials. Some of the key raw materials used in paint and coatings manufacture include pigments (titanium dioxide, zinc oxide etc), solvents (mineral turpentine) as well as resins and various additives.
Solvents especially are a category that are facing huge price surges. They are an extremely important component in paint formulations. According to British Coatings Federation data, solvent prices were up 78% in the last 3 months to the end of November (versus 12 months ago) with resins and related materials 39% higher.
Some solvents were even facing a staggering rise of 200% to 300%. This includes N-Butyl Acetate at £3,850 per tonne (310% higher versus 12 months ago). Other big rises were MIBK and N-Butanol (roughly 200% higher) as well as Methoxy Propyl Acetate which were facing price jumps of around 139%.
Although resins and pigment prices haven’t increased at the rate that solvent prices have, they are still facing big increases. For example, for resins and related materials, Solution Epoxy Resin prices were more than double the levels of a year ago. Similarly, prices for Desmodur, Cobalt Drier and Urethane Alkyd Unithane were also significantly higher.
In addition, pigment prices were also higher with Pigment Back prices increasing by 38%.
Why are Raw Material Prices Still Increasing?
So, why are raw material prices continuing to increase rapidly?
A major contributory factor to the raw material price surges has been the huge increase in oil prices. The price of oil increased by more than 70% over the past 12 months, to more than $113.94 (£86.81) a barrel, which was the highest since 2014.
On a more positive note, the price of Brent crude (the global benchmark for prices) recently dropped below $100 a barrel for the first time since the start of the March. However, it’s important to note, that oil prices are still relatively high, although below record highs.
Other Factors Putting Pressure on Paint and Coatings Companies
Surging energy prices are also putting enormous pressure on paint and coatings manufacturers. And the worst is still yet to come with many businesses on bespoke energy contacts that can expire at any point in the year. So, when this does happen, they face falling off low contract rates onto contracts at much higher rates.
And let’s not forget, paint and coatings manufacturers are still feeling the negative impacts of the COVID-19 pandemic, with manufacturers still having to contend with availability and price constraints.
On top of this, Russia’s invasion of Ukraine has caused commodity prices as well as oil prices to rise steeply. So, if things get worse, this could see even more disruption to international commodity prices.
Manufacturers are Raising Prices
Due to paint and coatings manufacturers contending with escalating inflationary pressures which show little sign of abating, many manufacturers are responding by increasing their prices.
A large German multinational chemical company recently announced they were increasing prices for their additives for the paint and coatings industry globally. The manufacturer claimed the price increase was a last resort due to needing to compensate for the surging raw materials, transportation, and energy costs as well as other increasing costs such as labour, packaging, and maintenance.
Similarly, Europe’s largest producer of paints also recently announced price increases citing the cost of raw materials and supply chain disruptions, as well as shortages of additives, petrochemicals, and packaging materials.
Time to Add Pigging to the Mix?
An extremely effective way to offset these increasing costs, and to improve the bottom line is to use HPS liquid product recovery (“pigging”) technology.
Pigging is a highly effective technology that reclaims residual liquid from pipelines that would otherwise be wasted.
The technology delivers a wide range of tangible benefits, provides ongoing ROI and fast payback for paint and coatings processing and production. That’s why pigging systems are in high demand by paint and coatings manufacturers.
In fact, the demand for HPS pigging technology is set to reach new heights in 2022.
Pigging Solutions for Paint and Coatings
With paint and coatings manufacturers facing unprecedented challenges, it’s important to respond with proven and effective methods. And that’s where pigging comes in.
Pigging uses a specially designed projectile (called the ‘pig’), which has an interference fit with the inside of the pipeline. This enables it to reclaim the residual liquid product from the pipe to its destination. Importantly, this product would typically go to waste as part of the cleaning and changeover process.
However, with a pigging system, this product is recovered, and can be packaged, used, stored, or sold just like all the other product. So, the yield increases from pigging are significant.
In addition to increasing yields, pigging systems for paint and coatings are an incredibly effective way to improve the efficiency, productivity, capacity, profitability, and environmental sustainability in paint and coatings production.
Custom Designed Pigging Systems
Designed around the precise needs and requirements of each customer, HPS custom pigging systems are used by leading brands such as PPG, Akzo Nobel, Kelly-Moore Paints, Ronseal plus may more.
They are helping paint and coatings coatings manufacturers lower their costs, and improve their bottom line by increasing yields, cutting waste, speeding up changeovers, reducing downtime, lowering energy usage, improving operational efficiency and so on.
And because they are designed for hygienic and sanitary applications, pigging systems help manufacturers reduce the risks of contamination and cross-contamination. Therefore, the benefits of pigging are significant.
Find Out More
If you process paint or coatings, or just about any other liquid or wet product, pigging will improve your profitability, enhance your competitiveness, and boost the bottom line (learn more about pigging return on investment and payback).
To speak to an expert about improving your processes through pigging, liquid product recovery and transfer solutions, then please get in touch.
HPS is an associate member of the British Coatings Federation.