Paint Prices to Rise Simultaneously

Rising Prices of Crude Oil and Other Raw Materials... Up to 20% Increase Starting May

[Asia Economy Reporter Kim Jong-hwa] Due to the rise in prices of raw materials such as crude oil, paint prices are set to increase across the board as early as May.

According to the paint industry on the 13th, major paint companies such as KCC, Noroo Paint, Samhwa Paint, and Gangnam Jevisco plan to raise prices by 5-20% depending on the product between May and June this year.

An industry official stated, "Due to the rise in international raw material prices, we have no choice but to increase the prices of products on the market," adding, "We are currently adjusting the price increase range and timing by product, but for products containing a large amount of epoxy resin, a minimum 20% increase is unavoidable."

While the price increase for eco-friendly water-based paints mainly used for interior purposes in ordinary households is expected to be low, paint prices used mainly for factory floors, commercial building interiors, and underground parking lots of buildings are expected to rise significantly.

The material that has risen the most recently is epoxy resin. Its main raw materials, Bisphenol A (BPA) and Epichlorohydrin (ECH), are not being supplied, resulting in limited production. Prices have increased by about 200% compared to the same period last year. Wanhua, a Chinese company that supplied epoxy resin to Korea, has stopped exports to Korea, and Japan's Thoso has reduced its supply volume to Korea by 50%.

Prices of petroleum-based solvents are also rising by 15-20% every month, and pigment prices have increased significantly. Although low-quality Chinese titanium dioxide (TiO2) is being traded at prices about 100% higher than in the third quarter of last year, the paint industry explains that due to a global shortage of supply, they have no choice but to import Chinese pigments.

Domestic paint companies rely on imports for about 60-65% of raw materials such as pigments, resins, and solvents mixed during the paint production process. Due to the rise in international oil prices, raw material prices surged significantly in the first quarter. The explosive demand driven by expectations of global economic recovery has also affected the supply of chemical products.

The 6% growth rate in China's domestic economy has caused a "black hole" phenomenon for raw materials, turning China from a chemical product exporter into an importer, resulting in a shortage of supply. The domestic market is also struggling with raw material shortages due to a significant increase in demand from higher consumption in the first quarter.

The industry expects that the average raw material purchase price for paint companies in the first quarter rose about 35% compared to the same period last year, and it is anticipated to increase by more than 40% in the second quarter. Because of this, even if production volume increases, profitability is expected to worsen further.

Paint, a compound of various materials, is produced by mixing powdered pigments to create color and distribute pigments evenly, resins to stabilize the coating film and adhesion, and solvents that dilute the paint to an appropriate consistency for application.