It is not likely that the U.S. paint and coatings industry in 2023-2024 will be recalled, in decades hence, with any particular fondness—but neither will it be recalled with horror, unlike The Great Recession of 2007-2009, from which it took the industry more than a half-decade to recover.

Despite sound underlying fundamentals in the U.S. economy, they are failing to exhibit their full potential for salubrious effect on the paint and coatings industry due to ongoing fears that interest rates will once again rise, and regulatory anxiety, especially related to the unfolding PFAS threat, is taking its toll. Nor is the U.S. immune to the chaos in the world around us—whether the war in Ukraine, the conflict in Gaza, the Houthi attacks on transport vessels in the Red Sea, or economic doldrums in the EU and China—everything going on around us affects the confidence of U.S. consumers.

Coatings volume from 2022 to 2023 was down 1.8%, while value was up slightly by 1.4%; volume and value from 2023-2024 estimated (2024e) are expected to be +2.6% and +5.3%, respectively. Looking ahead to 2025 forecast (2025f), we should expect to see +2.3% growth in volume and no more than +5.3% in value. Not exactly fireworks and roses this year and next, but no cause for hanging one’s head in shame, either, given that we still have some remnants from the global supply chain crisis with us, especially with regard to certain pigments and additives and some degree of ongoing difficulty obtaining raw materials from Europe. The price of crude oil, while below its historical highs, is nevertheless sufficiently high enough that no one in the specialty raw materials industry is serving champagne or setting off Roman candles.

Over the past three years, galloping inflation was met by the Federal Reserve with galloping rate hikes, which finally began to ease in 2023. On June 12, 2024, the U.S. Federal Reserve decided to keep interest rates unchanged and indicated that only one rate cut is likely before the end of the year. The federal funds rate remains within the range of 5.25–5.50%. What the traders looked at was the dot-plot to figure out if—and when—a cut would occur. Nonetheless, while Fed chair Jerome Powell is anticipating only a single rate drop during the remainder of 2024, various members of the Federal Open Market Committee (FOMC) have signaled several different views on this front.1 Four members anticipate no cuts, seven foresee one quarter-point cut, and eight support two cuts. The median projection for the benchmark federal funds rate is 5.1% by the end of 2024, implying just over one quarter-point cut. Through 2025, the FOMC now expects five total cuts, down from six in March, which would leave the federal funds rate at 4.1% by the end of next year.

While not all aspects of the Supply Chain Crisis of 2021-2023 have been completely sorted out, at least as of mid-2024, the majority of raw material suppliers and coatings producers are able to produce sufficient material to fill their orders with lead times, in the majority of cases, roughly the same as five years ago (i.e., prior to COVID-19). They aren’t necessarily conducting their businesses in the same way, however, because many firms have learned important lessons from the past four years and have changed multiple aspects of their approach to business in all areas—sales, technology, production, marketing, supply chain, etc. These changes have been more difficult for some than for others, but they have been necessary changes and have helped the producers that have implemented them. The hard truth, however, is that such change is going to be necessary going forward for all paint and coatings producers, because the supply chains throughout the global economy are increasingly vulnerable and subject to disruption more readily than at any time prior to 2020. The Russo-Ukrainian War (including the potential for NATO to intervene at some point), a slowdown in the Chinese economy,2 political tensions between the West and Russia/China, issues involving TĂĽrkiye’s relationships with both the EU and NATO, and the actions with respect to the widely misunderstood topic of PFAS that will be taken by various countries all have the potential to disrupt the supply chains to one degree or another. Moreover, any number of other factors in a globe fraught with distrust, contention, constant concerns about the price and availability of oil and natural gas, and an increasingly vocal consumer involvement with everything from global climate change and “sustainability” to microplastics in the environment will also have a destabilizing effect on global industry and its supply chains.

Could any of us have predicted in 2019 that, in 2023, everyone would be preoccupied with lower but still unacceptably high inflation, unprecedented rate hikes by the Federal Reserve, the nearly year-and-a-half Russian aggression against the sovereign State of Ukraine that has led to global energy fears, and the refocusing of the American vision of China from “trading partner” to “potential enemy?” Whether or not we saw them coming, each of these situations has affected the paint and coatings business globally, and the negative side effects are not going away tomorrow.

Although the industry recovered in 2021 from a 2020 dip in volume, the real news is the dramatic increase in value (~25% over the two-year period 2021–2023 estimated (2023e)) that has resulted from the high cost of crude, decreasing (but not completely halted) global supply chain issues, remnant shortages, improved (but not back to pre-2020 levels) transportation/ logistics issues, and labor shortages. All have led to galloping inflation that the chairman of the Federal Reserve feels will likely require at least two more rate hikes this year.

As of mid-2023, most raw material suppliers and coatings producers are able to produce sufficient material to fill their orders, though often with lead times that are longer than was the case just four years ago. Some raw material suppliers are sold out through the end of 2024, but paint producers seem to be back on a course that is trickier to navigate than in years past and definitely requires more foresight and strategy. R&D staffs at both raw material producers and paint manufacturers are still spending time, albeit less time than they did during the past two years, working defensively to make sure that they are prepared for raw material shortages that affect existing products, rather than offensively by creating the new and/or improved products that are the heart and soul of all manufacturing firms.

The hard truth, however, is that this is going to be necessary going forward, because the global supply chain has become increasingly fragile and is susceptible to damage more readily than in the past. The supply chains of our global economy are increasingly vulnerable and more easily disrupted than ever before, whether from the Russo-Ukrainian War (including the potential for NATO to intervene at some point), political tensions between the West and Russia/China, a slowdown in the Chinese economy,¹ issues involving TĂĽrkiye’s relationships with both the EU and NATO, the actions that will be taken by various countries with regard to the PFAS issue, or any number of other factors in a globe characterized by contention, distrust, and an increasingly vocal consumer involvement with everything from global climate change and chemical awareness to microplastics in the environment.

The Relationship of Crude Oil to the U.S. Paint and Coatings Industry, 2022–2024f

Each $10 increase in Brent crude results in a 3% increase in overall costs to coatings producers, representing an important factor in the overall dynamics and profitability of the paint and coatings industry. Understanding what is happening now and what is likely to happen in the near- and longer-term future of crude oil production is necessarily an important component of the creation of meaningful strategy for paint makers worldwide.

By Cynthia A. Gosselin, Ph.D., The ChemQuest Group

In 2022, marine coatings were an $8.7 billion market, with a growth projection of 5–7% through 2028.¹ However, there is a lot more to marine coatings than great aesthetics. At approximately a 64% share, anti-fouling/fouling release coatings were the largest portion of the marine coating market, followed by anti-corrosion and self-cleaning/self-polishing coatings. In addition, marine coatings have special and specific functionalities to protect watercraft above and below the waterline. Finally, marine coatings are specially formulated to be easily cleaned.

The two most significant drivers for the growth of the marine coatings market are transportation of goods by sea and recreational sailing. Unlike relatively new, speedy, expensive air shipping, transportation of goods by sea is a centuries-old tradition. To this day, it remains the preferred method for heavy or bulk products. Interestingly, it is also the most cost effective and it tends to have a lower carbon footprint and emission standards. Additionally, safe harbors are widely available almost everywhere there is water, making it a practical and accessible choice.

Recreational or leisure boating is the second largest driver of the marine coatings market. Whether for routine maintenance, hull cleaning, racing efficiency, fuel economy, or craft longevity, marine coatings are top-of-mind for large- and small-craft owners. In both the shipping and recreational categories, shipbuilding and repair are enjoying a resurgence in the post-COVID market.

With all these factors contributing to the growing demand for marine coatings, it’s essential to understand what they are and why they’re so vital. Simply put, marine coatings are broadly defined as waterproof protective layers that are applied to surfaces exposed to or immersed in fresh, brackish, or saltwater. Boats, ships, ferries, small watercraft, and marine structures such as offshore oil rigs and bridge structures employ some kind of marine coating both above and below the waterline.

A wide variety of coating chemistries can be used depending upon the specific substrate and service application, with the exception of unsaturated polyester resin (the type often used in fiberglass). Most marine coatings contain varying degrees of volatile organic compounds and can be applied by brush, spray, roller, or any other convenient method.²

Topside boat paints are usually 1K or 2K polyurethanes, buffable 2K polyurethanes, or alkyd marine enamels that protect the boat from UV damage. Bottom boat paints are antifouling coatings designed to reduce the attachment of aquatic organisms to the hull. Bottom paints include ablative and hard coat paints as well as primers. These types of coatings are best removed with paint removers especially designed for these chemistries.

The inability to escape the effects of biofouling beneath the waterline is one of the main reasons for the strength of the antifouling paint sector. Many boats and ships sat idle during the COVID-19 pandemic and exacerbated the problem, especially in relatively still, warm waters. Sitting idle in the harbor allowed the bottom of watercraft to accumulate barnacles, tube worms, algae, sea squirts, and slime.³ While this is a natural aquatic process, it is one of the most significant hurdles for boat and ship owners alike—particularly when speed and fuel economy are compromised. The commercial reason for using antifouling paints is for improving the flow of water passing the hull, and thereby maximizing fuel economy.

When a hull is covered by only 10% barnacle fouling, 36% more power from the engine is required to maintain the same speed through the water and could be responsible for 110 million tons/year of excess carbon emissions and $6 billion of addition fuel cost in the international shipping industry.⁴

Even recreational sailing is affected. Tapio Lehtinen was racing the 2019 Golden Globe non-stop, around-the-world race when he was almost stopped dead in the water. Racing furiously with his rival, he surprisingly noticed that he was being left behind. Thinking something had happened to his propellor, he dived in to check. To his dismay, barnacles were growing all over the hull. He did finish the race, but 110 days behind the winner. Barnacles had encrusted the entire bottom of the hull, stealing his speed. More had colonized on his self-steering blade, causing it to shear off when the load became too massive.⁵ Whether recreational or commercial enterprises, billions of dollars are spent every year to increase the usefulness, fuel economy, and longevity of watercraft by reducing biofouling.

Besides the economic and convenience factors, biofouling presents another important ecological concern. Marine life hitchhiking along the bottom of a boat can be the mechanism for translocating invasive species to the wrong ecosystem, far from natural predators.

Striped zebra mussels are a species native to the Caspian and Black Seas of Russia and Ukraine that have been distributed by ships as invasive species in Ireland, Italy, Sweden, Spain, the United Kingdom, and the United States. Root-like threads of protein called “byssal threads,” enable the zebra mussels to adhere very tightly to hard surfaces (like boat hulls, native mussels, and rocks). They colonize rapidly in the absence of natural predators, filter out algae needed by the “locals,” and are the succubus that attaches to and incapacitates native mussels. The zebra mussels form dense clusters that cut off water flow, clog pipes, and damage equipment. Their sharp edges can injure swimmers, and the infestation may lead to the devaluation of the boat. Since the 1980s, the Great Lakes in the United States have been struggling to eliminate this nuisance that just came along for the ride.⁶

Because of all the ship and yacht traffic, the Mediterranean Sea has more than 800 identified invasive species. In one audit of leisure vessels sailing through that area, 71% of leisure vessels were harboring at least one non-native species.⁷

Despite the problems plaguing biofouling of hulls, the landscape for marine coatings is moving toward sustainability measures and stricter environmental regulations. Copper-based, biocide-boosted antifouling paints have been the dominant performers in reducing biofouling. However, the effect of these paints does not segregate itself to affecting only those aquatic hitchhikers that attach themselves to the hull. Rather, cuprous oxides carrying biocides leach into the water, where they ultimately settle at the bottom of the sea or lake, also poisoning oysters, welk, clams, and other bottom-dwelling organisms.

Marine coatings manufacturers are now emphasizing improved sustainability along with operational performance factors of reduced power demand, lower fuel consumption, and carbon emissions. Manufacturers have had to become more cognizant of the environmental effects of biofouling agents because of the push by the regulatory agencies resulting from harbor contamination studies conducted during pandemic idle time.

Earlier, paints that contained the organitin biocide tributyltin (TBT) were banned on January 1, 2008, by the International Maritime Organization. For more than 40 years, TBT had been used successfully to boost the performance of cuprous oxide through controlled release. The problem with this effective method was that TBT would leach out of the paint, damaging the aquatic hitchhikers and contaminating the surrounding water. Once there, it would accumulate at the bottom, affecting the endocrine systems of shellfish. This led to abnormal developments, such as female snails taking on male sex characteristics, and severe deformities in oyster shells, making some beds almost extinct.

Since the TBT biocide ban, the number of effective biocides that meet regulatory requirements has decreased substantially. As a result, self-polishing copolymers (SPC), controlled depletion polymers (CPD), and foul release (FR) coatings are gaining popularity. Right now, the biocides in SPC and CPD are evenly dispersed in the matrix and not bound to anything. Release occurs when the matrix erodes (polishes) or by dissolution when water penetrates the paint film. These reactions are relatively uncontrolled and could lead to premature dissolution or over-leaching. Research is underway to find a way to attach the biocide molecules to a polymer carrier. Using hydrolysable covalent bonds could control the release rate of the antifouling constituents— mimicking the long-lived controlled performance of TBT.³

It is clear that a totally different strategy will be needed in the future to satisfy ultimate environmental concerns and regulations in harmony with antifouling performance characteristics. On the one hand, something is needed that will keep marine organisms from damaging and compromising marine craft below the waterline. On the other hand, even the most hardened industrialist agrees that the solution must keep from damaging everything else in its wake.

Nanotechnology that mimics the surface texture of algae that inhibits attachment of marine organisms is one outside-the-box thought. But this is still in the research stage and not yet available for mass production.⁸

There is one other approach that uses a totally different point of view and has proven commercially and environmentally successful. Ninety studies have been completed that pass the EU regulation Biocides Product Directive 98/8/EC (BPD) governing “biocides.” Regulating bodies in Japan (CSCL and JPMA), Korea (NIER), and China (MEP, Order 7) have also approved this material, and notifications have been provided to other relevant shipping regions.

Rather than using the typical paradigm of killing off the barnacle hitchhiker (and ultimately everything in the vicinity), an attempt was made to modify the attachment mechanism of the larvae.

Instead of using metal oxide biocides, medetomidine, a mammal anesthetic, was added to bottom paint. When exposed to medetomidine leaching out from a wet coating, the cyprid larvae of the barnacle species Balanus improvises were repelled from the surface. How? Medetomidine in tiny concentrations stimulates a receptor in the larvae causing hyperactive swimming behavior. Instead of settling down on the surface, the legs move at 100 kicks/minute, forcing it to swim away from the bottom of the boat. The effect is reversible. As the barnacle larvae move away, the kicking stops. This makes it impossible for the organism to attach to the surface.⁹

Since 2016, a thousand governing-body-approved commercial ship applications of this “biocide” were used successfully in several different biofouling paint formulations. This may be the first marriage of true environmental sustainability through benign influence on organisms and the desired performance from an antifouling marine paint.

About the Author

Cynthia A. Gosselin, Ph.D., is director at The ChemQuest Group, ChemQuest Technology Institute, ChemQuest Powder Coating Research. Email: cgosselin@chemquest.com.

References

1. IMARC Impactful Insights. “Antifouling Paints and Coatings Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2023-2028.”
2. “Marine Coatings Selection Guide: Types, Features, Applications | GlobalSpec.” https://www.globalspec. com/learnmore/materials_chemicals_ adhesives/industrial_coatings_ sealants/marine_coatings#.
3. Koch, S. “Invasive Zebra Mussels.” National Park Service, April 2, 2021. https://www.nps.gov/articles/ zebra-mussels.htm (accessed July 27, 2023).
4. “Sustainable Antifouling by Controlled Release from Polymer-Bound Selektope.” ITECH-Technical-Paper_ November-2022-1.pdf, November 2022, selektope.com (accessed July 27, 2023).
5. Strickland, K. “Tapio Lehtinen’s Barnacle Blight.” Yachting Monthly, May 22, 2019.
6. “The 5 Most Common Marine Fouling Organisms and the Effect They Can Have on Your Boat.” Electronic Fouling Control, Antifouling Tips, June 21, 2023.
7. Rotter, A.; et al. “Non-indigenous Species in the Mediterranean Sea: Turning from Pest to Source by Developing the 8Rs Model, a New Paradigm in Pollution Mitigation.” Front. Mar. Sci., 2020, 7, Marine Pollution Section, March 24, 2020.
8. Kumar, S.; et al. “Nanocoating is a New Way for Biofouling Prevention.” Front. Nanotechnol., 2021, Environmental Nanotechnology Section, Nov. 22, 2021.
9. “About Selektope® – A Sustainable Biocide Used in Antifouling Coatings.” https://selektope.com/ about-selektope/ (accessed July 27, 2023). When exposed to medetomidine leaching out from a wet coating, the cyprid larvae of the barnacle species Balanus improvises were repelled from the surface.

The past year marked a rebound in powder coating revenue as well as investment in R&D. In particular, both the North American and Latin American powder markets showed growth of 3.5% and 1.8%, respectively, in 2022.¹ These growth figures coincided with the introduction of several innovations in sustainability, low-temperature cure, corrosion resistance, outdoor durability, thin films, and thermoplastic application technology.

Sustainability

Sherwin-Williams recently introduced a powder coating product line based on post-consumer recycled plastic. Powdura® ECO powder coatings are formulated with polyester resins based on recycled polyethylene terephthalate plastic (rPET). Earlier versions of Powdura® ECO powder coatings were based on pre-consumer waste plastic that is generated in factories. This latest development will have an impact on recycling post-consumer plastic that comes mainly from beverage bottles.

According to the company, one pound of Powdura ECO TGIC/TGIC-free (triglycidyl isocyanurate) coatings contains the rPET equivalent of about sixteen 16-ounce water bottles, depending on the final product formulation Sherwin-Williams estimates that one pound of Powdura ECO hybrid coatings contains approximately the rPET of seven to ten 16-ounce water bottles, depending on the formulation.

Low-Temperature Cure

Pengchen (Simon) Yang, a senior researcher in allnex’s Corporate Innovation Group located in Wageningen, Netherlands, introduced a potentially game-changing powder technology at the 2023 European Coatings Conference. The breakthrough was described in his presentation, “Ultra Low Temperature Curing Powder Coating via Real Michael Addition.”

Yang’s work introduces a new chemistry to the low-temperature-cure powder coating universe. This fascinating technology is based on Real Michael Addition (RMA) chemistry that includes an innovative catalysis system that provides cure latency to this highly reactive chemistry. An RMA reaction relies on a combination of a “Michael donor” in the form of a nucleophile with an α,β-unsaturated carbonyl to create a Michael adduct. The allnex team, led by Yang, crafted this chemistry into solid polymers/oligomers that are extrudable and capable of film formation at relatively low temperatures, i.e., < 120 °C. In addition, these polymers/oligomers are reportedly stable at room temperature storage conditions.

This chemistry is comprised of two crosslinkable species: component A is a material containing C-H acidic moieties, and component B is an unsaturated polymer. The most preferred component A is a malonate functional polyester resin, and methacrylated polymers (polyester-, epoxy-, or urethane-based) are the most preferred B component.

The catalysis system is rather complex and is based on a catalyst precursor (P1) in combination with a catalyst activator (C1). P1 is a weak base (DABCO™ or tetramethyl guanidine) that reacts with C1, generally an epoxide compound, to produce a strong base catalyst. The epoxide compound can be TGIC, glycidyl methacrylate (GMA) acrylic resin, or Araldite™ PT-910/912. This catalyst technology is quite reactive; therefore, a retarder, typically a carboxylate, is used to introduce a degree of latency. Latency is critical to enable processing through the conventional extrusion techniques that are common in the powder coating industry.

Latency is further enhanced by macro-physically separating reactive species in independent compounded mixtures. For example, the C1 catalyst activator may be extruded into binder components independent of the P1 catalyst precursor/retarder blend. Two powder materials are generated that are then post-blended into a pseudo-2K powder mixture that is then applied to a substrate and cured at low temperatures, typically about 110–130 °C.

This groundbreaking technology is comprehensively detailed in the international patent application WO-2022/236519 A1, which was issued on November 17, 2022. It is the author’s hope that the powder coating world will take notice of Yang’s fascinating low-temperature RMA-curing technology and that this will open a spectrum of opportunities for growth into new markets and applications.

In other developments, AkzoNobel debuted Interpon W, a product group specially formulated for application to heat-sensitive substrates. Not only can these products be used to coat wood and engineered boards, but they can also be used on various plastics, gypsum, and plastic composites. Interpon W includes thermoset as well as UV-curable powder technologies. Allnex Resins is also supporting the development of low-temperature-cure powder coatings with the introduction of ultra-low-temperature-cure polyester resins. These include UVECOAT (UV cure) and Crylcoat (thermoset) resins specifically designed to cure at temperatures 80–135 °C.

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“My concern, however, is that decision makers are too often caught in traditional, linear (and non-disruptive) thinking or [are] too absorbed by immediate concerns to think strategically about the forces of disruption and innovation shaping our future.”

— Klaus Schwab, The Fourth Industrial Revolutionⁱ

I would like to begin this article by assuring all of CoatingsTech’s readers that “all is well—the raw material supply chains have returned to normal,” but I cannot. What I can say is that the statement is more like 85–90% true. There are still a few issues, typically with special materials that are not in broad general use, and also with certain alkyd and acrylic emulsion resins, but the majority of the bread-and-butter resins, solvents, pigments and additives of the U.S. paint and coatings industry are generally available, albeit with slightly longer lead times (at least as of early March, as this article is being written), and significantly higher selling prices than was the case three years ago. The supply chains are being helped, of course, by the fact that large portions of the paint and coatings industry, especially architectural, were seasonally down during Q4 2022, and because of the hoarding that had taken place between 2021 and Q3 2022, paint and coatings production during Q4 was largely made with the expensive raw materials that the industry collectively had in stock already.

Activity in January 2023 was nothing to write home about, but the de-stocking of raw materials held in the paint companies’ warehouses continued well into January, with a certain amount of spillover into February. Things began picking up for raw material orders in February, and it is reasonable to assume that the overall industry, along with its supply chain partners, will exhibit solid, but certainly not outstanding, performance by the end of Q1. My personal crystal ball doesn’t yield a lot of insight beyond Q1, although there seems to be a general consensus among both the raw material suppliers and the coatings producers in most segments that Q2-Q4 will give solid, although unexciting, performance. There is uncertainty, rather than fear, about the future among formulators. We are not seeing, at least as of early March, layoffs in paint, coatings, and inks manufacturers, although RPM announced in January that it was cutting production amid falling orders.ⁱⁱ

No one among the broad array of raw material suppliers, distributors, and coatings producers with whom I regularly have contact expects to see significant supply chain disruptions during 2023, but they tend to temper this feeling by adding one or more of the following qualifying phrases, “Assuming that:

• We do not have a recession.”
• “Neither the Russians nor the Chinese do anything to disrupt the global supply chains.”
• “We don’t have additional devastating earthquakes like the ones that hit TĂĽrkiye and Japan.”
• “Interest rates drop.”

That is, of course, asking a lot, but it is probably as realistic as it is possible to be in early 2023. As is generally the case, people in the industry tend to be thinking tactically, and there is certainly nothing wrong with that . . . unless it keeps them from learning the most important lesson taught by COVID-19: tactics alone aren’t sufficient as we move into the future. They must be accompanied by strategy, because the future is likely to be increasingly uncertain for global industry, and the only way in which we can be as prepared as possible to deal with future uncertainties is by putting strategic plans and systems in place that are able to anticipate future disruptions of various types, and create long-term plans for both avoiding such disruptions, and for dealing with them if they cannot be avoided.

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What we don’t typically hear about are the struggles of small and medium enterprise (SME) distributors and coatings producers and how they are dealing with the ongoing supply chain issues. Nor have we been hearing about raw material suppliers, both large and small, that despite the chaos surrounding them have nonetheless been able to continue, albeit at a slower pace, the R&D efforts that resulted in the introduction of new raw materials during the past 24-month period, that are of potential value to the paint and coatings formulators.

In a day and age when we are constantly bombarded with news, nothing ends up being actual news because we are inured to the whole concept. Similarly, in a paint and coatings industry where we are living with daily shortages, substitutions, price increases, transportation issues, allocations, force majeures, and lead times that can go beyond six months for certain types of raw materials, paint and coatings raw material suppliers, paint producers and paint and coatings users are basically becoming numb from the unending onslaught that made life so stressful in 2021 and is continuing into 2022.

About the best news I can offer, and it is qualified good news, as of the time of this writing in early March 2022, is that we appear to be seeing some stabilization in the overall situation, insofar as pricing increases seem likely to moderate, although pricing decreases do not appear to be on the horizon, with perhaps some isolated instances.

The cost of transpacific container shipments originating in the Asia Pacific region (APAC—excluding India) has been mitigated to some degree, but only to the extent that “outrageous” has come down to the “unbelievably high.” Comments from a range of raw material producers, SME distributors, and SME paint producers are in agreement that containers from Asia are now down to $10,000 to $15,000, from as high as $20,000 to $30,000.

Lead times are improving, and containers are still a problem, but they are easier to get than in mid-2021, and there is greater vessel availability. It appears that shipments from India, however, which did not increase in cost in 2021 to the same degree as those from APAC, may not have peaked yet—early 2022 increases have taken the cost to ship a container to roughly eight to 12 times the cost for shipments pre-2020.

Shipping from major ports in Europe, such as Antwerp and Rotterdam, are expected, as of the date of this writing (early March), to increase in April 2022 from April 2021 multiples of three to four times pre-2020 to four to five times, with the potential for future increases later in 2022. Domestic transportation seems to be plateauing—the equipment issue is in better shape and beginning in Q2-Q3 of 2021 drivers were becoming more available. Cost is still roughly two to three times pre-2020, however, and not likely to decrease while fuel costs increase during 2022.

January 2022 saw essentially across-the-board raw material increases in the range of 15%-25%, with a bucket of additives as high as +50%, depending upon the specific products in the bucket. This on top of total increases for a bucket of all paint components that totaled 20%-30% in 2021 has created a scenario that is unprecedented within the U.S. paint and coatings industry.

In 2021, resins, especially epoxies, acrylics, and diamines seemed to be the hardest hit with a combination of price increases, force majeure declarations, strictly controlled allocations and long lead times; alkyds are extremely difficult to get, have increased in price by roughly 50%, and manufacturers of alkyd paints are being forced to reformulate, depending upon which alkyds are available and which are not. One major producer of alkyd resins is down for an extended period of time for repairs, and another has indicated that it is exiting the commercial marketplace. This is not a good situation.

Pigments, at least for the first two quarters of 2021, were relatively stable with low single-digit increases. But they have been reported to increase roughly 10% during Q3-Q4 on a basket of both colored inorganics and organics, driven more by the organics, some of which received Q1 2022 increases on the order of 20%. NOTE: Titanium dioxide was excluded from the basket—its price has been rising steadily over the course of the COVID-19 pandemic, ending up at the end of 2021 roughly 10% higher than in 2020, and it is expected to increase by an additional 7%-10% during 2022. With the current tariffs in place, Chinese TiO₂ is not really a current factor in the U.S. market for paints and coatings.

Additives, regardless of type, from catalysts to flow additives, have probably caused more problems than any other category of raw materials, insofar as they are of critical importance to the performance of the final paints and coatings in which they are incorporated, and are among the most difficult components for which acceptable substitutes can be identified.

Entering 2022, availability is becoming a bit less tight entering 2022 for certain additives, but others are becoming even more difficult to obtain. Various PET additives, for example—and especially Fischer-Tropsch waxes—are in extremely short supply, with reports of lead times in excess of six months from multiple areas of the paint and coatings industry.

As supply chain issues improve, and paint makers go from lacking five or six raw materials to make any given batch of paint to perhaps only a single missing raw material, there is a tendency to breathe a sigh of relief. If that single raw material cannot be substituted, however, things really haven’t gotten any better. U.S. paint and coatings companies across the board have more orders than they can fill—this was true for all of 2021 and will continue to be true in 2022. The lack of a pound or two of a critical additive becomes even more of an issue under these circumstances.

Mining is highly dependent upon energy costs, and there doesn’t appear to be any end in sight as the cost of crude continues to rise: Brent Crude hit $128/barrel on March 8 before settling down to $111/barrel on March 9—and West Texas Intermediate (WTI) peaked at nearly $124/barrel on March 8, then dropped $15/barrel by the next day. Volatility on this scale clearly reflected increasing global anxiety as the situation in Ukraine and Russia escalated into a full-scale invasion while a desperately worried world looked on. As a result, mined filler pigments, such as clays, talcs, carbonates, et al., rose 20%-25% in 2021, and it is reasonable to expect further increases in 2022, not only for mined pigments, but also for all raw materials used in the paint and coatings industry that are affected by the price of oil.

Not just raw material and transportation cost and availability have been affected. The cost of containers, whether steel or high-density polyethylene, five-gallon pails, drums, or tote tanks, have doubled, tripled, and even quadrupled in price, and are subject to spotty availability—when they become available, anyone who needs them jumps on the opportunity to purchase, regardless of price.

There seems to be no doubt that raw material suppliers are in the process of jettisoning certain individual products and product lines so that they can allocate financial and personnel resources to the products that are the most in need and very likely the most profitable, as well. While some of these products may be restored to production following the end of the current supply situation, the general feeling among the raw material suppliers and formulators is that these will be handled on a case-by-case basis and will not be extensive.

Fortunately, quality issues with raw materials appear to have been few and far between, at least with regard to anything that can be picked up during the raw material testing and manufacturing process. Many formulators have pointed out, however, that they are concerned that there may be hidden problems that might not manifest themselves for at least six months or more, either as a result of substitutions that they are making or because of substitutions that their raw material suppliers are making. At least one formulator has been shut down making a major product line, due to a raw material quality issue, and it is reasonable to assume that this is not an isolated case.

The burden that all of the supply chain problems are placing on coatings laboratories throughout the world is onerous in the extreme. Laboratories that hitherto spent approximately 50%-70% of their time developing new and improved products have found that that they are now only able to spend 15%-35% of their time on R&D, and for some organizations, it is even lower.

Ironically, after years of benign neglect by the U.S. paint and coatings community, a lot more talk about “sustainability” has arisen during the chaos of the past 12-18 months, but only minimal work has been done in this area by laboratories that are overwhelmed with seeking, testing, and approving alternate raw materials in significantly more attenuated timeframes than would have been the case in the past.

At a time when “sustainability” is attracting more serious attention than ever before, the loss of a significant portion of R&D activity is doubly discouraging. Nonetheless, we should expect to see a significantly greater amount of emphasis placed on sustainability in formulation, production, packaging, and application as we move out of the current situation and can begin to concentrate on the way forward from here. In the past, “sustainability” has been largely a form of “green washing,” but the tide is turning, and the U.S. paint and coatings industry is beginning to become serious about this topic.

In characterizing 2021 and 2022, the temptation might be to simply indicate that 2022 looks like “more of 2021,” but with some improvements over the course of the year. This would not be a completely accurate picture, however. The shortages, price increases, long lead times, etc., that we experienced in 2021 had multiple causes, but a major one was the failure of the chemical industry to recover in a timely fashion from the freeze in the Permian Basin.

In 2022, many of the same forces that acted on 2021 are still in place, but now it seems that the most powerful driver is less the ability to make the desired chemicals, and more the labor shortages that are preventing sufficient amounts of these chemicals from being produced and shipped. As 2022 continues to unfold, it is very likely to be labor shortages, rather than raw material shortages, per se, that will be responsible for longer lead times, higher prices, ongoing allocations/closely controlled releases, etc. These factors began in 2019, were exacerbated in 2020, became crippling during 2021, and, all things being equal, will continue through 2022 and into Q1 of 2023, albeit likely at a less ferocious and less damaging pace as in 2021 and Q1 2022. Much, of course, depends upon the Russia/Ukraine situation, and especially upon China’s reaction to economic sanctions imposed on Russia by the West, but predicting the effects of a war requires a crystal ball that none of us possesses.

New and Exciting Raw Materials

Not all of the news is bad news, and there is some very good news to report during this otherwise frustrating and chaotic period of time. I have often, in the past, included in my articles, regardless of topic, an appendix listing new raw materials that have been introduced into the market within the past 24 months, and that have struck me as being particularly interesting.

Because R&D for raw material suppliers has also been dramatically reduced, just as it has for paint and coatings suppliers, I have noticed fewer new raw material introductions during the past two-year period than during similar periods of time during the past two decades. Nonetheless, there has still been a significant level of activity by producers of component materials for paints and coatings, and given that, even during the pre-COVID era, I heard almost continual complaints from formulators that the “Raw material suppliers don’t have anything that’s new,” it makes sense to highlight some of the new products that have come to my attention.

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The products that I have chosen to include in this article are raw materials that their producers claim are not just “me too” products or “tweaks” of existing products, but new materials that truly have the potential to “make a difference” to the coatings formulator who needs to create properties that do not currently exist, or significantly improve properties that do. I see such materials every year, and—without endorsing or recommending any of them on behalf of myself, ChemQuest, CoatingsTech, or the American Coatings Association—I am including them in the table on the following pages because I understand that the products in this random and arbitrary selection of raw materials have all been introduced within the past 24 months, and it makes sense for paint formulators to take a look at them, especially if they appear to address any properties that would be helpful in their current product development projects.

Because it is often difficult to persuade paint makers to look at new raw materials, suppliers of new materials should also give serious consideration to having their new products tested and validated in a variety of coatings technologies by independent, third-party laboratories that can provide unbiased results that can then be presented to the paint formulators as “proof of concept” documentation.

CONCLUSIONS

Value Purchasing is Important. I have definitely come to be under the impression that “A” customers have been much better taken care of with regard to more generous allocations and shorter lead times than “B” and “C” customers, which should probably surprise no one. The days are past when purchasing on the lowest possible price makes sense. The future will be built on value purchasing, not on the lowest price, or just-in-time (JIT) supply chains, which have crumbled—and were destined to crumble—when the kind of pressure seen during the past two years was applied to them. All industries, not just paints and coatings, are in the process of learning this necessary lesson. I cannot emphasize how important this is, because—while the future may or may not hold another pandemic in store—pressure on global supply chains will be with us for decades to come, and the time to adjust to a new, more appropriate way of surviving and flourishing in the face of such pressures is now.

Price Increases Will Continue. Overall, my sense is that the industry is in for “more of the same” during 2022. Pricing increases, overall, are likely to be moderated, but it would be premature to expect too many actual decreases. Quarterly pricing contracts and/or annual volume contracts with quarterly escalator clauses will continue to be the norm throughout 2022, and into at least Q1-Q2 of 2023. Lead times are beginning to shorten for many raw materials in Q1 2022, as are delivery times, although the cost to ship will continue to fluctuate, depending upon the part of the world from which the shipments are coming, the price of oil, availability of shipping containers, and access to labor. The wild card is, of course, the situation in Ukraine: as of this writing, Russia has invaded, and the major governments of the West are on high alert and contemplating a variety of punitive options. Adding to the potential disruptions is the fact that China appears to be supporting Russia, at least with moral support, but this could all change if sanctions or military intervention from NATO are invoked against Russia, some combination of which is certainly within the realm of possibility. A conflict of this magnitude has the potential to inflict severe damage on all of the global supply chains. The reader will be in a much better position to judge what the “situation in Ukraine” means when reading this article in April than I am, while writing it in February and March.

Continued R&D is Critical. Despite COVID-19, despite devastating supply issues, and even though paint and coatings companies have been forced for nearly two years to divert their R&D resources from product improvement and product development to survival mode, in which the daily emphasis was on identifying and approving raw material substitutions, the raw material producers soldiered on ahead, whenever possible, to provide a stream of new and improved products. Many of these have received scant attention from coatings formulators, who simply have not had the time or resources to evaluate new raw materials, unless they had the potential to become substitutes for existing materials that were in short supply. When the current situation finally abates, and things return to yet one more “New Normal,” the paint and coatings producers who are the first out of the gate with new and/or improved products will have a distinct advantage over their competitors, and the raw material suppliers have given them the products to enable them to do so. This is good news in an otherwise chaotic and uncertain time. Now is the time to proactively take this good news, and these new raw materials, and—either on your own, or with the expert assistance of a third-party formulating expert—turn them into future race-winning products.

About the author: George R. Pilcher is vice president at The ChemQuest Group | ChemQuest Technology Institute | ChemQuest Powder Coating Research, with headquarters in Cincinnati, OH. For more information, visit www.chemquest.com or e-mail or call George at 513-262-8727; gpilcher@chemquest.com.

For over half a century, Color Marketing Group® (CMG), a not-for-profit international organization, has produced and delivered an annual color forecast two years into the future. This year is no different. CMG revealed its 2023+ World Color Forecast™ at its Virtual International Summit held at the beginning of November 2021.

The CMG World Color Forecast detects and expresses the movement of colors within the color space. It is a manifestation of societal changes, economic and political climates, environmental shifts, and technological and scientific advancements. It interprets, through color, the human psychology as a response to these movements.

The forecast represents the collective research of its members and guests who come together at the annual in-person and virtual, local, and international ChromaZone® Color Forecasting Workshops. Based on their expertise in color, they share, interpret, and discuss their observations to create and forecast colors with the goal of enhancing manufactured goods and turning a shared passion for color into business opportunities.

Influences on the CMG Forecast

The research and discussions leading to CMG’s 2023+ World Color Forecast recognized technology, space exploration, climate change, the acceleration of digitalization and digital consumerism, among the major mega and macro trends that will drive consumer products and services through design, materials, and color as we delve forward into this decade.

With the start of the 2020s, the world was pulled into the vicious circle of the pandemic. While the efforts of scientists, virologists, physicians, politicians, corporations, and members of the public continue to lessen the impact of the pandemic, or put it behind us, the sequels of the pandemic will continue to influence our lives and therefore design, materials, and colors. This is because color and color forecasting express a portion of our psychology as humans.

In the Asia-Pacific region, the CMG Forecasting Committee questioned the practicality of adopting electric vehicles beyond urban areas. Since this is closely connected to the availability of green power, the source of the green power remains questionable. It is a matter of extreme urgency to adopt technologies that will find environmentally sound solutions for the future of battery storage and recyclability, which will have a direct impact on vehicle design, materials, finishes and colors.

In Europe, the Forecasting Committee emphasized the importance of sensibly sourced materials in a world of environmental difficulties and raw material shortages. The shifts in design, handling, and manufacturing processes will have a great impact on materials. The longevity of design and products was highlighted as a crucial aspect of future design.

For the Latin American Forecasting Committee, local customs and traditional use of natural pigments exploited from local resources for hundreds of years will not become less important because of new technologies. They will continue to play an intrinsic role in the forecast.

The North American Forecasting Committee acknowledged that space tourism and civilian space exploration have become a reality. The blend of reality with technology has landed firmly, and the future is unfolding now. In addition, the work from home and the acceleration of everything virtual have marked a key shift in the paradigms related to work ethics and how that is influencing design and color. These technological advancements will have a great impact on our psychology and sociology and, therefore, will greatly affect design and consumer choices.

Climate change was a subject collectively discussed by all regions. Color forecasters said that taking responsibility for our actions and reducing our footprint is no longer an option, but an obligation that lands upon us all. To heal the planet and heal ourselves, we must all be accountable. We must recalibrate and be optimistic.

CMG 2023+ World Color Forecast™

The CMG World Color Forecast for 2023 and beyond reveals a predominant direction of warmness emanating from yellow and red-based colors. This warmth is balanced by the freshness and calmness induced by blue and green-based colors. Purple will be giving space to magenta pinks and dusty, near-neutrals situated between gray and mauve on the color spectrum.

Comforting, earthy, yellow, and red hues, with medium-to-high chromaticness will prevail in North America but will emerge with lesser saturation in South America. The traditional patriotic red will make a comeback, while yellow and orange colors will become less significant than in previous years in the Asia-Pacific region. The warm tones will be less prominent in the European region driving forward a cool edge of low-chroma, cloudy blue and green shades. A softer approach to lower-saturation colors represents Europe’s continuous search for balance and harmony with nature.

As a symbol of water and the skies, blue will be most significant in the North and Latin American regions. The influence of blue will be palpable as an ecological color that flows in our daily lives. The overall appearance of blue in the Southern Hemisphere will be vibrant, inspiring new opportunities as we move ahead. In contrast, green, symbol of nature and the exploration of our surroundings, will have a reduced influence, and the tendency will be for yellow-based greens. In the Northern Hemisphere, the freshness of blue and green hues will play a balancing role with the soiled yellow and brown-orange colors. In Asia Pacific, the cool colors are expected to shelter back. However, those remaining in the forecast will be warmed up with red influences.

Purple will be rather contracting in the Asia-Pacific and European regions. With the introduction of muted, achromatic, blue-influenced grays that look like lilac, the Forecast envisages purple morphing into neutrality. Inversely, North America will be rejoicing with bright, digitally inspired purple, while South America is introducing pale, blue-based lavender symbolizing the ambivalent emotions as we veer away from the pandemic.

Snug, nuanced neutrals gain a considerable spot in the color forecast. This echoes the raised awareness and prominence of responsible design and sensibly sourced materials. The shift in how designers are examining and selecting the source of colorants, and how companies are handling the manufacturing processes will have a major impact on materials, driving many to display colors that resemble those obtained by fibers blended during the recycling process or outsourced by plant-based strands.

In Latin America, neutrals will exhibit yellow-green and blue-green nuances, denoting the stillness of our desire to turn off all our devices to enjoy being offline. In Europe and North America, the subtleties of the neutrals will be influenced by red, while in Asia Pacific they will appear either with a warm, yellow-red influence or with a cool, purple feel, adding a sense of balance to the forecast.

What is most remarkable in the 2023+ World Color Forecast is the evidenced, cyclic aspect of color. The forecast confirms that color moves forward in cycles. The pandemic effects of isolation triggered a nostalgic feeling to the past—any past. Since the future remains enigmatic, we long to past eras in a world devoid of COVID-19. Numerous colors are revived from past decades. Many of them are making a comeback due to the entrance of new generations into the markets and their willingness to explore colors they are not familiar with from the 1970s, 1980s, 1990s, or post-9/11 and post-economic crash.

The influence of technology and space exploration is ushering a fluorescent glow into the forecast. Many colors for North America and Asia Pacific are predicted to display luminous qualities as if they were backlit with neon-like light sources. In Europe, metallic effects will add vibrancy to some of the muffled, dark shades.

2023+ Key Colors

For each region, CMG designates a “Key Color.” The Key Color is carefully chosen based on its importance and significance to the color direction, and how it connects to the regional color stories.

The Key Color for Asia Pacific is “E.łŐ.” An allusion to electric vehicles, E.V. is a luminous, neon-like blue with whispers of natural green notes. This color telegraphs the enthusiasm around the topic of clean energy and new methods of sustainability, as we witness the world deliberating the shift to battery-powered vehicles and alternative energy, and the associated issues yet to be resolved. It represents mobility, not only in the sense of transportation, but also in the determination to move forward with new revolutionary technologies for clean energy. The foliage green, conventionally used as symbol of the environment, gives ground to a vibrant blue to communicate environmentally related matters.

The Key Color for Europe is “Revival Green.” Effortless to the eyes, this delicate, blue-based green symbolizes the embedding of our love for nature and represents our need to protect it. Natural colors will enhance consumer’s choices in selecting more environmentally friendly products. Revival Green incarnates the need for further sustainable lifestyles and caring for ourselves. But to be able to do so, we first need to care for our planet. Living in sync with Mother Earth is a necessity articulated by the subtle, greyish, blue influences of this green shade. It does not scream for change nor optimism, but it carefully pushes us toward the right direction.

The Key Color for Latin America is “Mirada Alegre,” which in Spanish means “joyful look.” A creamy, soft orange with a sense of balance between yellow and red, Mirada Alegre personifies the light our hearts diffuse to the outside world. It represents the energy drawn to allow us to recapture the lost moments of our lives as the pandemic ravaged our existence. With this orange tone, and within this orange space, we are allowed to celebrate life and regain that joy we once had in another time before the pandemic.

The Key Color for North America is Bohld, a true, unnuanced, grounding, rich, universal black that represents strength and power moving to new days. Its darkness is not sad nor subdued, but rather contemplative and expressive, exciting, and courageous. The reckoning of race, gender identity, age, accessibility, financial inequity, and prejudice will usher in a culture that overpowers fear with mindful dialogue, deeply inspiring and embracing the changes underway. Bohld celebrates diversity and inclusion. It is a color of positive transformation. Bohld celebrates each person.

A Distinctive and Relevant Color Forecast

The distinctive characteristic of the CMG World Color Forecast derives from its exclusivity to members, the details of which are not available for sale to the public. The forecast is relevant to individual and corporate members because it is created by color forecasters, designers, marketers, scientists, students and professors who represent a vast array of consumer and industrial sectors, including paints and coatings, pigments, surface materials, automotive, appliances, architecture, building products, fashion, cosmetics, lighting, flooring, wall coverings, teletronics, robotics, as well as visual communications.

Speculations vs. Facts

The wealth of insights and data conveyed through a CMG Color Forecast eliminates the assumptions and speculations about the colors that will appear in the market and sell the following years. It allows an organization to save time and resources by projecting and planning its product lines and supply chains based on a reliable and dependable resource, curated by a credible, professional international organization in the field of color.

CMG color forecasters do not gaze into crystal balls to predict future colors. They follow an extensive, established process that begins with observations, research, workshops, discussions, and culminates into color stories that are backed with a color forecast.

About the Author

Montaha Hidefi, MIB, CMG is a color archeologist, writer, public speaker, and vice president, color forecasting at Color Marketing Group. Contact her at montaha.hidefi (at) yahoo.com. Learn more at www.colormarketing.org.

Q. How does your company participate in the rheology modifier market for paints and coatings?

Williams, Dow Coating Materials: Dow is a leading supplier of HEUR and HASE rheology modifiers for the waterborne coating industry. We have a long history of inventing in this space. Today our ACRYSOL™ product line is extensive and well adapted to serve multiple end-use markets and applications.

Sullivan, MĂĽnzing: MĂĽnzing produces HEUR and HASE type of rheology additives for water-based coatings, paints, tints, adhesives and inks. The product portfolio of polyurethane thickeners covers the entire rheological profile from highly pseudoplastic, through pseudoplastic to Newtonian.

Moore, BASF: BASF offers a broad portfolio of rheology modifier chemistries for water-based, solvent-based, and solvent-free systems in the paint and coatings markets. RHEOVIS additives are synthetic rheology modifiers designed for aqueous systems, including non-ionic associative (HEUR / HMPE), anionic associative (HASE) and non-associative anionic (ASE) technologies. EFKA
additives are specifically designed for solvent-based and solvent-free systems consisting of polyamide wax and hydrogenated castor oil chemistries. ATTAGEL attapulgite rheology modifiers perform as thickening and suspension aids for improved sag resistance and long-term stability. Each product class has its own properties and applications to enable formulators to achieve their desired rheology profile with all types of resins. Our rheology modifiers also provide additional functionalities like wetting properties and health or environmental benefits such as suitability for formulations free of VOCs, odors, APEOs and heavy metals.

Sieto, Elementis: Elementis is a significant supplier in this market. We have a broad portfolio in the market, which includes associative, acrylic, organic thixoptropes, and clay-based thickeners.

Q. What are some of the key industry needs and trends driving innovations for rheological additives?

Sorrell, BASF: Customers have requested thickeners that provide thickening in only one part of the rheology curve for targeted viscosity control. Another request we have received is for synthetic versions of the cellulosic chemistries. Also, there is a focus on more sustainable and environmentally free additives (tin-free, low/no VOC, etc.). Additionally, rheology modifiers that provide performance uniformity across different application methods is driving our innovation efforts. Rheology modification has become an increasingly targeted technology. Unique formulations require technologies that can offer varying profile development. Ease of use in formulation preparation and in the final product are key innovation perspectives.

Sieto, Elementis: Developing thickeners which maintain performance or increase efficiency while having no impact on the resin performance. We are always looking to improve sag, scratch resistance, and anti-staining properties in architectural and industrial paints.

Williams, Dow Coating Materials: Consumers are demanding higher performance paints in terms of appearance and resistance properties. We see properties such as hiding and surface smoothness and “toughness” as key features beyond traditional premium products. Attaining these attributes relies heavily on finding the right additives to help take paint performance to the next level.

Sullivan, MĂĽnzing: Due to regulations on harmful substances and growing end-user concerns about environmental and health hazards in coatings, the entire industry is working on more
pollutant-free formulations to include no APEOs, parabens, VOCs, and solvents. Additionally, Europe and parts of Asia have noticed a major trend in preservative-free paints and coatings with high pH value. In response, we have been working towards the development of new, pH-stable rheological additives.

Q. Is the use of biobased materials finding its way into the manufacture of rheology modifiers, and are you seeing interest in biosourced materials from coatings manufacturers or their customers?

Sieto, Elementis: Yes, more customers are asking us for biobased and naturally derived product. We have both. Our clay-based thickeners are based on natural hectorite, which is mined. Our organic thixotropes are based on castor beans which are biobased.

ĚýIyer, Dow Coating Materials: Consumers are also looking for more sustainable paints which is helping to drive the industry to replace petrochemical-based ingredients with progressively increasing amounts of biobased materials. A life-cycle assessment of a paint containing only petrochemical sourced materials typically shows a higher carbon footprint (CO₂ emissions) versus a paint with equivalent performance that is made in part from biobased sources. It is important that the sourcing of biobased raw materials is done in a thoughtful way from regions where advanced farming practices are pursued and where there are no known water-scarcity challenges. As rheology modifiers are used in small quantities, their contribution to greenhouse gas (GHG) emissions is low in the manufacturing process, but they also offer functional benefits in the storage and use phase of a paint. The progress of EU Green Deal legislation is expected to accelerate more sustainable paints with better environmental profile beyond low odor and VOC.

ĚýSullivan, MĂĽnzing: Recently, we have noticed an increased demand from our customers for additives based on renewable raw materials. We have therefore just launched a new series of HEUR rheology modifiers, TAFIGEL PUR R (R = renewable), to meet this demand.

ĚýAchord, BASF: For many years, sustainability has been a core pillar at BASF where we focus on developing products that make the best use of our available resources and enhance the quality of life for the world’s future. Our ATTAGEL line and some of our EFKA rheology modifiers are derived from natural resources. BASF is also evaluating the conversion of many raw materials that make up our synthetic rheology modifiers to sustainable and biobased alternatives.

Q. Are there any regulatory issues or environment/health/safety (EHS) concerns, such as materials of concern, that is driving new research and product development efforts in rheological additives?

Sullivan, MĂĽnzing: The biggest regulatory concern we are grappling with is to make more rheology modifiers acceptable to be used in products that have contact with food. We are looking into new product development for more food contact applications. Again, our industry is working on more pollutant-free formulations (no APEOs, parabens, VOCs and solvents) because of both regulations and end-user concerns about environmental and health hazards in paints and coatings.

Achord, BASF: Nearly all newly developed rheology modifiers in the industry are developed as low or zero VOC. On top of this trend, which has been in the works for some time, APEO-based products are being replaced within the markets we serve. This enhances the overall environmental compatibility and reduces potential health hazards in the final products offered to the market. Increasingly, food contact is becoming more of a focus in development. Our rheology modifier portfolio offers versatile offerings that also support USDA food compliance for functional and flexible packaging applications. This ensures our customers can formulate for all desired applications.

Sieto, Elementis: One area of huge concern is the use of biocides. We are currently limited on what we can use, and we continue to test and develop products that are biocide free.

Wang, Dow Coating Materials: We are always working to develop new solutions that perform better and are more sustainable throughout the life cycle of paints. We want the products we develop to have minimal environmental impact, which is why we continually try to develop the next generation of sustainable paints.

Q. From a rheology perspective, what do you consider as the top challenges for paint and coatings formulators, and do solutions exist today or is innovation required?

Wang, Dow Coating Materials: Formulators have many choices to optimize overall compatibility of paint ingredients while delivering on paint stability and paint performance. Choice is influenced in part, by what is on the shelf—that is, by formulator experience. But delivering on new paint attributes dictates utilizing new additives and sometimes new rheology modifiers. It is this process of optimizing choice for a given final performance balance that continues to be both an opportunity and source of complexity for our industry.

Sullivan, MĂĽnzing: It is possible to solve many problems with available rheological additives; however, this requires profound formulation expertise on the part of coating developers. For example, viscosity drop on tinting is best addressed by formulating pigment concentrates with polymeric dispersants instead of surfactants.

Sorrell, BASF: The biggest challenge is finding the right rheology balance with newer latexes that are on the market. Latexes are being pushed to smaller and smaller particle sizes, which can be a challenge to stabilize with rheology modifiers. A smaller particle size means more surface area, and thus the response to thickeners is much more profound. While the requirement of less thickener may be viewed as a benefit, a certain amount of rheology modifier is needed for good application performance and storage stability. Furthermore, next-generation latexes are doing more by providing improved features in certain performance properties, such as stain resistance or opacity, but can also negatively impact rheology. The efficiency of rheology modifiers while maintaining the desired profile is also a key focus. Many times, the highest efficiency products come with drawbacks such as incorporation difficulty, equilibration time, and final product stability. Final film properties can be impacted strongly using rheology modifiers, and key innovations are required to either eliminate drawbacks or introduce additional functionality to the coating.

Sieto, Elementis: There are a few examples that we solved during the past few years. One example is the use of certain solvents in industrial coatings that cause a reduction in the efficiency of the rheology modifier and reduce sag. We created a product called THIXATROL PM 8058, which has much higher efficiency in these systems. One other example is viscosity drop on adding colorants to deep tint bases. Again, we developed associative thickeners that hold up very well.

Q. Have you introduced any recent products for controlling the rheology of paints and coatings?

Moore, BASF: BASF is working on several new rheology modifiers and adjusting our production to maximize our supply to customers. Our newest innovations, Rheovis PU 1192/1193, are higher-efficiency pseudoplastic thickeners and scheduled to launch in 2022. Additionally, we are exploring new concepts for a HASE product that could be used to partially, or completely, replace HEC use in formulations. We are also continually researching new techniques and test methods for evaluating the performance of our additive portfolio. Our focus for rheology modifiers includes visual methods for identifying flow and leveling potential as well as real-time-force measurements for application ease. Also, BASF is in the process of relocating our associative rheology portfolio to Castelbisbal, Spain. This site previously supplied many of the same products to regions outside North America. The move to Castelbisbal will ensure that our quality of supply will be uniform throughout the globe and strengthen our global knowledge on market trends and R&D efforts to better support our global customers.

Sieto, Elementis: Elementis recently introduced THIXATROL PM 8058, a new amide-based organic thixotrope for use in solvent-based coatings such as high-performance industrial coatings for marine and industrial maintenance applications. It provides high viscosity, thixotropy, and thick-layer sag control in high-build systems that contain aromatic solvents (e.g., xylene) and polar solvents (e.g., n-butanol, benzyl alcohol, etc). THIXATROL PM 8058 is activated at low temperatures, enhancing manufacturing efficiencies, storage stability and improved process control. It also has a high percentage of biobased raw materials to help customers meet high sustainability demands.

Williams, Dow Coating Materials: We recently developed new products such as ACRYSOL™ RM-725, ACRYSOL™ RM-3030, and ACRYSOL™ RM-1600. These products allow for formulating across a very broad spectrum of formulations from economy flats to specialty coatings. We optimized formulations that allow for benefits in both professional and do-it-yourself paints. We are prepared to highlight full formulating guidelines for optimizing features with these products, such as hiding, sheen uniformity, levelling, and cleanabilty at all sheen levels.

Sullivan, MĂĽnzing: MĂĽnzing is working to introduce a series of HEUR thickeners using biobased building blocks in NAFTA (TAFIGEL PUR R), which are currently available in Europe. We are also working to introduce a new series of HASE thickeners for high pH value formulations.

Q. What advice would you give formulators who are designing a waterborne coating formulation and trying to optimize rheology with additives?

Sullivan, MĂĽnzing: For a truly in-depth understanding of the properties of rheology for finished products during manufacturing, storage and processing, developers should be aware of the basic properties of various rheology additives (e.g. cellulose ether, HASE, HEUR, ASE, etc.). Also,
rheology issues may be improved by selecting more appropriate pigments, fillers and dispersing additives as well as appropriate processing conditions (e.g. shear rate, rate and order of addition). Furthermore, the use of a high-end rheometer and the performance of rotational, oscillatory, and combined measurements is essential to identify the causes of problems.

Sorrell, BASF: Optimizing rheology can be tricky with heterogenous mixtures such as paints. There are many components that can add to or detract from your rheology performance. Therefore, if you are working with a formulation that has evolved over the years, I recommend returning the formulation to the basics. To solve problems, formulating by addition can unnecessarily complicate rheology optimization. More than any other paint ingredient, rheology modifiers are expected to perform different functions under varying circumstances from in-can particle suspension, in-can feel, brush/roller-applied feel, and drag, spatter resistance, flow, and sag balance.

Achord, BASF: One needs to consider the entire rheology curve when selecting rheology modifiers. Most often a single thickener is not sufficient to provide good in-can storage stability and sag resistance as these two attributes are on opposite ends of the rheology curve. It is best to select a low-mid-shear thickener in combination with a high-shear thickener to provide the best rheology profile for the application. How it will be applied and the environment where the paint will be applied is yet another important factor in rheology modifier selection. For instance, if the coating will be spray applied, select a thickener that is strongly pseudoplastic for improved atomization. If the coating will be subjected to exterior exposure, water resistance will be a key factor, and therefore, the water sensitivity of the thickener choice should be considered.

Sieto, Elementis: Make sure you are open to working with a supplier who can recommend the right product based on your paint system. This will speed up your development time and give you the performance you need.

Wang, Dow Coating Materials: Think rheology early! Your choice could greatly influence film and application properties, as well as overall end user experience. Take advantage of the best measurement science. Design of experiments coupled with high throughput capabilities can speed your journey to the best solution. Test and refine your model with real-world application methods.

Williams, Dow Coating Materials: Be open to change and recognize that a new solution sometimes demands new products (i.e., products not on your shelf). Formulators and suppliers alike have a role to play here in demystifying rheology. We are not alone, but we pride ourselves in providing experts who can translate paint rheology from basics to optimizing solutions for most formulation spaces.

Much has happened since last year, when I last addressed the State of the U.S. Paint and Coatings Industry in the . At that time, I indicated that no one other than the most committed optimist would predict anything better for 2020 than a global economy suffering from a minimum of a 4-7% decrease in the global Gross Domestic Product (GDP), compared with the 2019 pre-COVID-19 prediction of an increase of 2.9%.

Clearly, I was being a bit of a pessimist because, thanks largely to a v-shaped recovery, the global GDP for 2020 declined by only 3.3%, and the U.S. GDP by 3.5%. Estimates for 2021 from the World Bank suggest global GDP growth of 5.6%, and 6.8% for the United States, with China leading the pack at a whopping 8.5%, so recovery is well underway.

This is not to say that things are “back to normal”—not by a long shot. Despite the recovery,Ěýglobal output will still be about 2% below pre-pandemic projections by the end of this year.ĚýMoreover, at the end of June 2021, the entire supply chain was a mess:

• Production of virtually everything used in manufacturing industries, such as paint and coatings, cannot keep up with demand.
• Shipping costs doubled and, in some cases, tripled; load-to-truck ratios were up anywhere from 400%–1,700% year-over-year, April 2020–April 2021.
• Just as the great ports of the United States were beginning to become less backed up in May, a coronavirus outbreak forced Chinese authorities to shut down parts of Guangdong province, which is home to Yantian, one of the world’s busiest ports and a major gateway for containerized exports. As of late June, the port was only back to 70% capacity operation, with approximately 50 ships backed up, and roughly 350,000 loaded containers stranded on the docks.²
• In April 2019, the price of a common lumber western spruce and fir two-by-four was around $400 for every 1,000 linear board feet. The price rose to approximately four times that amount by late May 2021, hitting just over $1,600 for every 1,000 linear board feet, before dropping to $960 in June.³ Lead times extended to 12 weeks or more, up from only two weeks or less, pre-pandemic.
• As a result of the “Great Freeze” in February 2021 on the Gulf Coast, production across the Permian Basin dropped by an average of more than 2 million barrels/day over three days during the third week in February.⁴ As of the end of June, we found that a surprising number of products from this area are still subject to force majeure and/or allotment and the supply chain, with individual product exceptions, won’t be fully functional until early in 2022.
• Epoxy resins, for all intents and purposes, are simply not available, a situation that will also not be rectified until early 2022.
• Raw material price increases for a basket of components used to make paints and coatings; adhesives; sealants; caulks; plastics (e.g., ABS, PVC, and acrylic); and similar materials used in construction will increase anywhere from 9% to 20% for 2021, based upon what we are seeing at the end of June.

The dominoes just keep falling. Yes, COVID-19 played its part as one component of what had turned into a “perfect storm,” regarding the North American paint and coatings industry by February 2021, as did the “Great Gulf Freeze,” but the current situation has been a “storm in the making” for the past eight to 10 years.

The only way in which to increase resilience in the supply chain is to create greater visibility across the entire supply network, coupled with greater agility in responding to shifts in the environment.

Rising consumer demand⁵; historically low mortgage ⁶; serious problems with insufficient personnel and equipment in the trucking sector⁷; an extremely high savings rate; high consumer confidence; and other lesser factors have all affected the economy during the past several years to bring us to where we are today.

For this reason, it is an exercise in futility to blame COVID-19, the Gulf Freeze, the shortage of trucks and truck drivers, or any other factor or set of factors alone. The problem is that U.S. industry, in general, has failed to build resilience into its supply chains, and we are now paying the price for the industry’s negligence.

In March of this year, the “American Rescue Plan” placed an additional $1.9 trillion in new stimulus funds into circulation at a time when many experts felt we were on the cusp of a consumer boom. This will only exacerbate the situation for the most prepared of all manufacturing and construction firms, and will potentially wreak havoc on less-prepared producers of raw materials and finished goods, that have failed to build sufficient resilience into their supply chain philosophies and practices.

IS A BOOM GOOD NEWS?

On the surface, a consumer boom sounds like good news, but—upon closer examination—it really bears a mixed message. With consumer spending up, prices tend to rise. People travel more, raising the demand for gasoline, diesel, and jet fuel, leading to shortages and higher prices. With the current low interest rates, an increasing number of millennials will wish to purchase their first homes or “buy up,” leading to an even worse residential home shortage than is currently the case, while driving up housing costs. As a result of the shortages, and resultant price increases, of lumber and other construction materials, the average new home costs about $40,000 more today than it did at this time last year.⁸

We quickly see a picture forming: a picture in which inflation is increasing; lumber, steel, aluminum, PVC, ABS, epoxy, acrylics, and virtually all other manufacturing and construction raw material costs are rising; and the finished goods made from those raw materials are forced into higher pricing, whether a gallon of paint, a pail of construction adhesive, or a new residential home.

It is a picture in which the already challenged U.S. trucking fleet and driver shortage cannot be addressed soon enough—a picture in which facility shutdowns have exacerbated already existing shortages and lengthened supply lines that were already strained. In short, we have a mess—and we have a mess because the global supply chain is fundamentally lacking resilience, i.e., lacking the capacity to recover from difficulties quickly.

Clearly, changes need to be made in the global supply chain, and they need to be facilitated by those companies that rely upon it not only to remain in business but to flourish. The only way in which to increase resilience in the supply chain is to create greater visibility across the entire supply network, coupled with greater agility in responding to shifts in the environment.

Diversification—of the supplier base, production footprint, and transportation partners—will be increasingly necessary to avoid the pitfalls that we are experiencing in 2021 and contingency planning takes on much greater importance than has heretofore been the case, when such processes were more talked about than implemented.

Those who prefer to see the current, chaotic situation as a direct result of the pandemic, in light of the assumption that “things will return to normal” at some point in the future, have a very rude awakening ahead of them. Those enterprises that understand that the current issues have been developing over a period of many years, and that they will not go away just because COVID-19 does, are already beginning to realize that they need to take a new approach toward spreading their risk—even if it comes at a higher cost.

The crisis of 2020 made clear that the old ways of purchasing will no longer produce optimal results—we have had a powerful light shone on the importance of visibility across the supply chain. Increased data sharing by raw material producers, adhesive manufacturers, lumber suppliers, steel producers, et al., and end-use customers is truly going to be a necessity to avoid the kinds of surprises that are becoming increasingly common, and that wreak havoc with people and systems because they were not anticipated.

Of the nearly 150 executives responding to the Foley & Lardner LLP Global Supply Chain Disruption and Future Strategies Survey,⁹ 70% agreed that, because of the lessons that they have learned from the pandemic, sourcing from the lowest-cost supplier will no longer be the sole focus in making supply decisions. Companies will place greater emphasis on partnering with suppliers that have more resilient and flexible processes to assure continuity of supply.

Sixty-two percent of respondents in this same study agreed that the pandemic will lessen companies’ focus on just-in-time manufacturing models in favor of warehousing and inventory banks for additional protections against shutdowns. Companies will reduce their reliance on single sources for the supply of various materials and components. Where dual sourcing is a viable option, manufacturers can, and should, qualify alternate suppliers with manufacturing operations in different locations.

It’s not pretty, it’s not going away anytime soon, and we won’t see the establishment of the “new normal” until 2022. Isn’t this plenty of incentive for anyone with common sense and a strong survival instinct to begin handling their supply chains differently going forward than they have in the past? Building resilience into the entire process is the only way forward, and it will require that we spend less time being concerned with the lowest price, the fastest delivery, minimum inventory, and the longest payment terms—and more time focusing on visibility, agility, diversification, and contingency planning.

With this in mind, it is time to take a look at an overview of how the U.S. paint and coatings industry performed in 2020, is performing in 2021, and is likely to perform in 2022.

References

1. World Bank. “Global Recovery Strong but Uneven as Many Developing Countries Struggle with the Pandemic’s Lasting Effects,” June 8, 2021.Ěý(accessed on July 5, 2021).
2. “Chinese Port Logjam Threatens Christmas Shipping Rush,” Paris, Costas.ĚýThe Wall Street Journal, June 21, 2021.Ěý (accessed on July 11, 2021).
3. Phillips, Matt. “As Lumber Prices Fall, the Threat of Inflation Loses Its Bite,”ĚýThe New York Times.Ěý(accessed July 19, 2021).
4. Jacobs, Trent. As Temperatures Rise, U.S. Producers Expected to Recover Rapidly.ĚýJournal of Petroleum Technology, Feb 19, 2021.Ěý (accessed May 13, 2021).
5. Trading Economics: U.S. Bureau of Economic Analysis.Ěý(accessed May 13, 2021).
6. Trading Economics: Mortgage Bankers Association of America.Ěý(accessed Feb 26, 2021).
7. Huff, Aaron. Driver Shortage Credited for Buoying Freight Economy in 2020 and Likely into 2021.ĚýCommercial Carrier Journal, Nov 11, 2020.
8. Ratzlaff, Brady. “Lumber Industry and Home Building Materials Seeing a Drastic Increase in Price, Shortages.” Global News. April 30, 2021.Ěý (accessed May 13, 2021).
9. Uetz, A.M.; Kalyvas, J.; Miller, V.; Wegrzyn, K. Global Supply Chain Disruption and Future Strategies Survey Report, September 2020. Foley & Lardner LLP website.Ěý(accessed May 13, 2021).
10. Federal Reserve Bank of Atlanta.Ěý(accessed on July 10, 2021).
11. Ferraris, Vittoria. “Global Auto Sales Forecast: The Recovery Gears Up,” S & P Global website.Ěý (accessed July 19, 2021).

CoatingsTech August 2021 | vol. 18, no. 8