Summary of Annual Raw Material Prices for Powder Coatings in 2023 | Cold market, sluggish demand, and disappearing profits

The industry competition is becoming increasingly fierce. Due to the unfavorable situation in the real estate industry over the past year. Affected by this, real estate related industries such as steel, building materials, furniture, home furnishings, and household appliances are facing serious overcapacity and inventory backlog problems. This also indirectly leads to a decrease in paint demand and an imbalance between supply and demand.

The main tone of the paint industry in 2023 is a slow recovery, but after a year, the industry's recovery speed has clearly not met expectations, and demand remains weak. Coupled with factors such as global economic slowdown, declining sales prices, and environmental production restrictions, most corporate profits are not satisfactory, and the industry as a whole is low. Due to the weak demand from numerous downstream industries worldwide, companies have had to lower their sales prices to adapt to a market with significantly reduced orders and more intense competition.

However, upstream raw material companies for coatings are also generally struggling. In 2023, the raw material industry faced the most serious challenges in recent years: increased overcapacity, insufficient domestic and international demand, significant market price declines, significant shrinkage of enterprise profits, and even more difficult business operations. At present, the entire paint industry chain, especially raw material enterprises, is suffering severe losses.

Due to sluggish market demand, 2023 has also been the year with the lowest price fluctuations in recent years. The market is mainly dominated by transactions on demand, and the phenomenon of hoarding in previous years is less common in 2023. Next, let's take a look at the raw material prices for 2023:


Entering 2023, the starting price of epichlorohydrin in China was 8540 yuan/ton, and the ending price was 8091 yuan/ton, with a difference of 449 yuan/ton between the two. In addition, the highest price for the year is in February and March, and the lowest price is in the middle of the year. The difference between the highest and lowest prices is about 1432 yuan/ton. Overall, in 2023, the new production capacity of epichlorohydrin continues to expand, and downstream and terminal consumption is lower than expected. The market supply and demand imbalance is obvious, and the price of epichlorohydrin continues to operate at a low level.

Public information shows that compared to the addition of 320000 tons of epichlorohydrin production capacity in 2022, the increase in epichlorohydrin production capacity slowed down in 2023. Within the year, Quzhou Juhua added 100000 tons/year, Shengxiao Technology added 30000 tons/year, and Shandong Xinlong added 10000 tons/year.

epoxy resin

Compared to 2022, the fluctuation of epoxy resin throughout the year in 2023 is relatively small. At the beginning of the year, it was 14400 yuan/ton, and at the end of the year, it was 13200 yuan/ton, with a difference of 1200 yuan/ton. In addition, the difference between the highest and lowest prices at the end of the year is about 2600 yuan/ton, while the difference between the highest and lowest prices in 2022 is about 9000 yuan/ton. This also indirectly reflects the limited enthusiasm of downstream purchasing in 2023, only maintaining the follow-up of essential needs.


The current problem of overcapacity in the TGIC industry is obvious, but the actual demand is weak, leading to a price war in the industry. The highest price of TGIC in 2022 reached 52000 yuan/ton, while the highest price in 2023 was only 30000 yuan/ton. This is still due to the improvement of domestic commodity sentiment due to the opening of the epidemic at the beginning of the year and the demand for stocking before the Spring Festival. TGIC prices have followed the cost increase. But after the year, the demand recovery did not meet expectations, coupled with an increase in new production capacity, TGIC prices came under pressure and declined. In 2023, the lowest TGIC reached 25000 yuan/ton, and the price of TGIC decreased significantly. TGIC's profits are already operating at the bottom, so even if the market continues to be weak in 2024, there will not be a deep downturn. But currently, there is still no sign of an improvement in demand, and the TGIC industry cannot indeed improve.

In terms of production capacity, due to fierce competition in the TGIC industry in 2023, profits have declined, and some companies have incurred losses. It is expected that the construction of some TGIC production capacity projects will also gradually slow down and be put on hold. The industry will enter a "reshuffle period" in the future.


Looking at the whole year, the highest point of HAA in 2023 is even lower than the lowest point of the previous year. The highest point of the year was only around 16300 yuan/ton at the beginning of the year, and the lowest point was 14000 yuan/ton. There was a slight rebound at the end of the year, ending at 14500 yuan/ton.

It is interesting that, in addition to the overall downward shift in prices compared to the previous year, the price trend throughout the year has converged with previous years, with a more significant increase and decrease throughout the year. This is relatively rare among a group of stable operating raw materials, which indirectly indicates that the supply and demand of the HAA industry are relatively mature.


Compared with the sharp fluctuation of 8950 yuan/ton between the high and low points in 2022, the price trend of new pentanediol in 2023 remained surprisingly stable, belonging to the low level operation in the past three years. Except for the price increase caused by factory parking and stocking at the beginning of the year, the price of new pentanediol was mostly adjusted in the range of around 8600 to 11000 yuan due to limited downstream demand throughout the year.

In addition, in the first half of 2023, the domestic new pentanediol industry added three new units, namely Luxi Chemical, Baichuan, and Huachang Phase 2, with a total production capacity of 100000 tons. With the commissioning of these three new units, the domestic new pentanediol production capacity exceeded 600000 tons, with a production capacity growth rate of up to 18.5%.

Indoor polyester, outdoor polyester

In 2023, the highest point of indoor polyester is 11100 yuan/ton, and the lowest point is 10200 yuan/ton; The highest point of outdoor polyester is 12500 yuan/ton, and the lowest point is 10900 yuan/ton. Both have shown a slow downward trend overall throughout the year.

A polyester enterprise in the industry expressed to Qutu Coatings (Qutu website), "Nowadays, polyester resins are highly homogenized, and the prices are getting cheaper as they sell. It's getting harder and harder to make money year by year." In just a few words, it's both true and heartwarming. In 2023, the market is cold, demand is sluggish, and profits are disappearing... Many polyester resin companies have fallen into the quagmire of low growth, even negative growth.

In 2023, the industry generally felt that market demand was shrinking, but the total production capacity of polyester resin further increased, leading to further overcapacity in the industry. Affected by this, polyester resin is also selling cheaper and falling into the quagmire of price competition, repeatedly squeezing the profits of enterprises.

Titanium dioxide

Titanium dioxide is one of the few raw materials for powder coatings that has seen an increase, and the market is still good this year.

In mid December, several titanium dioxide giants including Longbai Group, CNNC Titanium White, and Lubei Chemical announced price increases for their products. The increase in export prices for titanium dioxide enterprises this time is mainly attributed to the strong overseas demand and sufficient enterprise orders at the current stage. In the domestic market, due to the high prices of raw materials such as titanium ore and sulfuric acid, manufacturers are facing significant cost pressures and therefore have to raise product prices accordingly.

The proportion of titanium dioxide raw materials, titanium concentrate and sulfuric acid, has reached about 50%, and the price trends of these two products are both in the historical high range of prices in the past decade. Especially last year, due to multiple factors, the international commodity prices of crude oil continued to rise, and the prices of basic materials such as sulfuric acid and chlorine in China experienced a temporary surge, which also led to a significant increase in the cost of titanium dioxide raw materials. Another important raw material for titanium dioxide, titanium concentrate, has also seen a surge.

This is the seventh round of price increases in the concentration of titanium dioxide enterprises this year. Previously, domestic titanium dioxide companies announced price increases on February 1st, March 1st, April 12th, July 26th, August 24th, and September 19th, respectively. Overall, the difference between the highest and lowest prices for the whole year is 1900 yuan/ton.

In 2023, based on the evolution of PTA trends, the market can generally be divided into 5 segments, as follows:

The first stage (January to mid to early February): Seasonal accumulation and PTA price fluctuations.

Phase 2 (mid to late February to April): The US rescue policy alleviates banking issues, coupled with news of OPEC production cuts, stimulating crude oil prices to soar. The expected seasonal maintenance of PX on the cost side also boosted prices. The spot liquidity of PTA is further tightened with its low supply and increased polyester load, resulting in a significant strengthening of PTA basis and a significant increase in futures prices following the spot prices.

The third stage (late April June): crude oil decline and negative demand feedback, resulting in a decline in PTA prices.

Phase 4 (June to mid to early September): Demand exceeds expectations, and the cost side drives up PTA prices significantly.

The fifth stage (from late September to present): In late September, due to market trading expectations of a recession in the United States and weak demand in China, coupled with the traditional off-season of gasoline and diesel consumption, crude oil prices plummeted significantly. PTA multiple device maintenance and a reduction in contract supply from a mainstream supplier, phased inventory removal of PTA, as the overall price center shifts downwards.


Looking ahead, despite facing many difficulties, there are still optimistic voices that the paint industry is expected to usher in a turning point in 2024. On the one hand, the macroeconomic policy of stabilizing real estate remains unchanged, which is beneficial for the paint industry. The demand for raw materials may increase, but it is unknown how much downstream demand can increase. On the other hand, enterprises are actively seeking transformation by adjusting their product structure and reducing production costs to cope with market changes.

However, in order to truly achieve the industry's "ice breaking" rebirth, enterprises still need to make more efforts. This includes strengthening technological innovation, improving product quality, optimizing supply chain management, and strengthening marketing. Only in this way can enterprises stand invincible in the fierce market competition and achieve sustainable development.

Created on:2024-01-16 13:30
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