Marine coatings market: Floating towards slight growth

Like other end-use industries, the marine coatings segment has also been affected by the global pandemic. For the marine industry it has been more challenging to perform the maintenance work due to temporary lockdowns that have been enforced in several dry dock locations. Also, a growing number of vessel lay-ups as a result of the changing economic picture has been seen during the pandemic. A current picture of the marine coatings market by European Coatings editor Damir Gagro.

A ship.
According to the researchers  Image source: Mariusz - (symbol image).

Newbuilding orders declined logically in response, according to market research firm Markets and Markets (MaM), from 75.3 million tonnes deadweight (1,120 ships) in 2019 to 70.6 million tonnes deadweight (859 ships) in 2020. It was the second consecutive year of falling demand after peaking at 87 million tonnes deadweight (dwt) in 2018. Nonetheless, the shipbuilding industry remained remarkedly resilient in 2020 compared with some other recent years such as 2009 and 2016, when newbuilding orders barely exceeded 30 million tons deadweight. Although the demand for bulkers and special ships followed this global downtrend, demand for tankers was almost on a par with the previous year. Meanwhile container carrier orders exceeded the 2019 mark.

Market size estimated at 890 million litres, worth USD 4.4 billion in 2020

Gathering reliable figures for the marine coatings market is difficult. Especially under the current circumstances of a pandemic. The editorial staff of ECJ talked to various sources to obtain a reliable picture on the current market size. Out of these conversations, which are in slight contrast to Bertelsen’s assumptions, the market could be estimated at a size of 890 million litres in 2020, worth USD 4.4 billion. According to market insiders, the figures for 2019 were 875 million litres and USD 4.3 billion. “Guesstimates” for 2021 and the following years look positive as the volume and value should gradually increase. MaM expects the marine coatings market to grow at a CAGR of 1 to 2 % in the next five years. The market is consolidated, with top 10 players such as Akzo Nobel, Chugoku Marine Paints, Jotun, PPG, Hempel, KCC, Kansai, Nippon Paint, Sherwin-Williams and RPM (Carboline) accounting for around 95 % of the overall market share.

The major driver for the market is the growing demand from Asia-Pacific (APAC), owing to the rapid development of the shipbuilding and offshore engineering industries in the region. The overall international trade has resulted in the expansion of trade through sea routes. This has increased the number of bulk carriers, container ships, and general cargo ships manufactured, in turn, widening the scope of the marine coatings market in APAC. Fluctuating raw material prices are expected to adversely affect the overall cost of production incurred by the marine coatings manufacturers.

Mads Bertelsen of Hempel: “We see the market by volume for marine coatings being slightly down compared with last year, due to a very strong dry-dock year in 2020 and few newbuild orders being signed during the height of the pandemic. However, we do see strong interest from more owners and charterers in the marine market to invest in higher performing and more sustainable hull coatings, which is having a positive effect on the size of the marine market.”

Shipbuilding resilience as a powerful sign of future recovery

Globally, most of the marine coating companies have witnessed tough market conditions in the marine industry, where the combination of decelerating demand of new ship building and increasing competition contributed to negative organic growth in the last few years. Significant negative impacts were observed in the marine new build markets in China and South Korea. The marine coatings market remained challenging in 2020, and has contracted further as a result of low demand in the new shipbuilding market, according to MaM.

Despite the logistical hurdles and difficulties in travelling and crew positioning, newbuilding deliveries was at 88.7 million dwt in 2020 versus 97.8 million dwt in 2019. As a consequence of the imbalance between deliveries and newbuilding orders, the global orderbook decreased from 199 million dwt at end 2019 to 180 million dwt at end-2020, the lowest figure since 2003. Meanwhile, the world fleet has continued its uninterrupted growth since 1999, as it increased to 2,008 million dwt (39,782 ships) at end-December from 1,940 million dwt (38,992 ships) one year earlier.

In spite of these challenges, MaM states, marine coating manufacturers are optimistic about witnessing underlying organic growth across most segments of the market and geographies. For the long term, manufacturers are positive about a recovery in shipbuilding manufacturing, which is likely to drive the demand for marine coatings.

A more detailed version of this analysis of the marine coatings market can be found in European Coatings Journal 9/2021. The issue is available digitally at our online library 360°.

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