Looking back to 2024. the powder coating industry, driven by the dual goals of "dual carbon" and environmental regulations, has shown unprecedented development vitality and resilience. This year, the industry has not only made remarkable achievements in technological innovation and market expansion, but also made solid steps in environmental transformation and standard construction.
Powder coatings, with its unique advantages of high efficiency, environmental protection and economy, are gradually becoming a green pioneer in the field of coatings, leading the entire industry towards a more sustainable future. From the revision of the list of hazardous wastes to the release of green production standards, from the in-depth cooperation of upstream and downstream enterprises to the continuous improvement of market influence, the powder coating industry has achieved leapfrog development in multiple dimensions. This series of changes not only brings new growth opportunities to the industry, but also provides consumers with more environmentally friendly and safe product choices.
Next, let's review the challenges encountered by the powder coating industry in the past year?
Epoxy resin industry under the heavy pressure of anti-dumping duties
As an important raw material for powder coatings, the price fluctuation of epoxy resin directly affects the cost and competitiveness of downstream industries. On November 7. 2024. the U.S. Department of Commerce officially announced that it would make a preliminary anti-dumping ruling on epoxy resins imported from China, India, South Korea, Thailand and Taiwan. The dumping margin of Chinese producers/exporters was initially ruled to be a staggering 354.99% (the actual margin rate after deducting subsidies was 344.45%), which is much higher than the rulings on other countries and regions, such as 12.01%-15.68% in India, 16.02%-24.65% in South Korea, 5.59% in Thailand, and 9.43%-20.61% in Taiwan.
This ruling has a profound impact on China's epoxy resin industry and downstream powder coatings industry. As one of the world's major producers of epoxy resins, China has an annual production capacity of about 6 million tons, but domestic demand is not enough to fully absorb these capacities, and exports have become an important way to alleviate the contradiction between supply and demand. As an important trading partner, the United States' anti-dumping duty ruling will undoubtedly put tremendous pressure on China's epoxy resin exports.
The supply stability and price of epoxy resins are both key factors in the powder coatings industry. If the export of epoxy resin is severely restricted, domestic powder coating manufacturers may face the dual pressure of upstream enterprises reducing production capacity and intentionally raising prices to make up for profits, which will not only increase production costs, but also affect product quality and delivery time, and thus have an adverse impact on the competitiveness of the entire powder coating industry.
EU imposes high tariffs on Chinese titanium dioxide
On June 13. 2024. the EU decided to impose a temporary tariff of up to 39.7% on Chinese titanium dioxide, far exceeding market expectations. This move will eliminate the price advantage of Chinese titanium dioxide in the European market. Relevant data show that in 2019. the export volume of domestic titanium dioxide exceeded the 1 million tons mark, and in 2023. the export volume of titanium dioxide reached 1.64 million tons. From 2021 to 2023. the domestic titanium dioxide export volume accounted for 34.5%, 39.13%, and 41.07% respectively, and the export share increased year by year, and the export growth rate of titanium dioxide exceeded the production growth rate. From the perspective of export destinations, Europe is the second largest market after Asia, of which Asia accounts for 52% and Europe accounts for 21%, ranking the top two regions for China's titanium dioxide exports.
At present, domestic enterprises have gained a place in the foreign market by virtue of the quality and batch stability of titanium dioxide products. The EU launched an investigation into the dumping and industrial damage of Chinese titanium dioxide with the aim of using leverage to constrain China's titanium dioxide exports.
The potential threat of Trump's tariff stick
Trump announced on social media that he would impose a 10% tariff on all Chinese goods due to drug problems such as fentanyl. Trump has repeatedly made remarks about the "tariff stick" and plans to introduce a package of tariff plans to impose tariffs of up to 60% on goods imported from China.
This policy will have a great impact on Chinese companies, especially in the transportation equipment, automobiles and their parts, steel, aluminum and its products industries. Rising costs, higher prices, reduced competitiveness, and limited export markets will have a chain reaction on the coatings industry. Downstream customers of these industries, including the coatings industry, will face huge market uncertainties.
Trump's tariff policy not only directly impacts China's exports, but also restricts the development of China's high-tech field, resulting in pressure on the RMB exchange rate and A shares, and interferes with China's fiscal and monetary policies. In this context, it is particularly important for enterprises to improve their internal strength. They need to strengthen internal management, improve production efficiency and quality, and focus on technology research and development and innovation to cope with possible trade barriers and technical challenges.
Faced with multiple challenges, the powder coating industry needs to find a way out as soon as possible. Whether it can get out of the predicament in the future requires the joint efforts of the entire industry and the test of time.
