A gloomy outlook for anticorrosive coatings
The demand for corrosion protection coatings is strongly influenced by the public expenditure on infrastructure. Currently, many projects are stalling and therefore current consumption does not reflect demand. In the next few years, however, the market should develop more positively, as predicted by the market research company IRL.
The market for corrosion protection coatings in 2018 is estimated by the market research company IRL at 74 million tons in volume and EUR 26.5 billion in value. However, the data only refers to 21 countries. Grand View Research is also in a similar corridor with its forecasts and estimated the market at a value of EUR 27.1 billion. The expectations for the coming years also look positive. IRL forecasts growth of more than 2 million tonnes by 2023, which would bring the volume up to just under 9.5 million tonnes.
Lion’s share was consumed in the Asia-Pacific region
The market value would rise by more than EUR 7 billion to EUR 33,6 billion. The largest consumption of these coating systems in 2018 was in Asia-Pacific, about 84 % (6.2 million metric tons) of the total global volume. According to the IRL, this region will also be responsible for the major part of the volume increase. Market researchers expect consumption in the region to reach almost 8.1 million tonnes in 2023. IRL identified a significantly lower consumption in volume for the entire American continent. Not quite 7 % of the total volume of corrosion protection coating materials was consumed in this region last year.
Nevertheless, the almost 0.5 million tons are the second highest consumption globally. However, this volume is expected to rise to over 0.6 million tonnes by 2023. In third place, in terms of consumption volume, is Europe. According to IRL, consumption in this region last year was 0.4 million tonnes. A slight growth is also expected here. Market researchers forecast a volume of 0.45 million tons in 2023. The European umbrella organization of paint and coatings manufacturers, CEPE, also agrees with a slight growth trend. Since 2014, domestic sales have risen steadily year-on-year, albeit only slightly. Only from 2015 to 2017 was there a slight decline of 0.7 %.
However, the association expects domestic sales to be just over 0.2 million tonnes. However, the statistics only include figures reported by the companies organised in the association. The Middle East and Africa region recorded the lowest consumption of 0.29 million tonnes. Only slight increases are also expected in the next three years. By then, consumption is expected to rise to 0.33 million tonnes.
Of the twelve companies that hold the largest market share in the segment of corrosion protection coatings, only three are European (Akzo Nobel, Jotun and Hempel). The group of the remaining nine paint manufacturers have their headquarters in the USA (PPG, Sherwin-Williams and RPM), China (Dowill and Chugoku), Japan (Nippon Paint) and South Korea (KCC).
Declining trend in Europe
The current evaluations show a very differentiated picture of the market situation for corrosion protection coating materials. Predictions show a declining trend in both the quantities and the value of these coating materials in Europe. The reasons for this are to be found in faltering but urgently needed infrastructure projects, such as the renovation of road and rail bridges, railway stations and other infrastructure projects.
The situation is further aggravated by the increasingly reluctant willingness of industry to invest and the drastically reduced production figures for wind turbines. All in all, a gloomy picture, although many of the urgently needed projects have been approved and cannot be carried out due to bottlenecks. However, the implementation of such projects will again contribute to the positive market development in the coming years.
A higher performance of the coating materials or coating systems leads to a longer protection period of the corrosion protection coatings on the objects. With the publication of the revised basic standard DIN EN ISO 12944, the new protection duration “very high” (protection duration greater than 25 years) was also introduced on the basis of many years of experience. It goes even further: the corrosion protection of a bridge designed for a service life of 100 years is to be renewed at most twice instead of three times. A study by CEPE has clearly shown that the greatest environmental impact of renewing the corrosion protection of traffic bridges is caused by traffic diversion.
Investment backlog clouds forecast for Germany
From the point of view of market researchers, producers of corrosion coating materials should look forward to further growth, albeit low in Europe. In Germany, however, the industry is less optimistic. In 2018, the VdL announced that the sales volume of 45,000 tonnes was worth EUR 180 million.
The figures for 2019 will only be available in the coming weeks, but a slight decline can nevertheless be expected. One reason could be the investment backlog in cities and municipalities, which has reached a record level. In 2018, overdue investments totalled EUR 159 billion – of course this figure does not only include projects directly related to corrosion protection. The fact that the investment backlog in Germany is dissolving only slowly is no longer due first and foremost to lack of money. There is often simply a lack of projects that can be implemented quickly.
There are many reasons for this inertia. The construction industry is currently working at full capacity anyway, so that not only are prices rising, but public clients are finding it difficult to find companies. After all, the state with its bureaucratic processes is not always a popular builder-owner. Another major problem is that the federal, state and local governments do not have enough planning capacity to move projects forward.
The Handelsblatt cited the following example: The Directorate General of Waterways and Shipping alone estimates that it lacks at least 500 engineers to rehabilitate the hundreds of locks and 7,300 kilometres of rivers and canals. Things are not looking any better in the municipalities that are planning roads or schools. In many offices there is an acute shortage of staff, which cannot be remedied in a hurry. The austerity measures of the past are likely to take their revenge now. Experts estimate the economic damage caused by omitted or improper corrosion protection measures in Germany only at a volume of around EUR 90 billion per year.
By Damir Gagro.