China’s coatings market has witnessed another rise in output for H1 2017, while the profits for manufacturers went down once more due to rising raw material prices and environmental pressure.
During the first six months of this year, the combined output of 1,358 large-scale coating manufacturers in China increased by 10.50% YoY to 641,000 tonnes. The output growth was supported by the strong economical southern region of China, while other areas in west and north even saw declines in output.
In 2016, China produced 57% of coatings in the Asian Pacific and 28.50% of the world total, proving that China had become a major production base of the international coating industry. In H1 2017, domestic coating manufacturers ended up in the red and the profit losses of them surged YoY due to climbing prices of raw materials, environmental inspections and merger and elimination in the coating industry.
During the latest round of environmental inspections in China, coatings manufacturers have suffered huge pressure with several small and middle-sized enterprises needed to shut down due to insufficient environmental protection measurements.
After all, producers of coatings are very vulnerable to price hikes of raw materials, because the costs of those can make up to 86% of the total operating costs. As a result of the rising prices, many manufactures have increased their quoted prices for coating products to relieve some of the cost pressure.
The industrial coatings market is growing steadily and will reach a market worth of about USD41,700 by 2022. The industry is marked by a row of mergers and acquisitions, while manufacturers are paying more focus on enhancing their product portfolio to stay ahead of the fierce competition.
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