Reg Adams, Chief Executive at Artikol
The markets for the different pigments are markedly different from one another. In the markets for some pigments, there are only one or two dominant global suppliers. Other pigment markets are highly competitive, allowing customers a wide choice of supply sources. No single manufacturing group offers the full range of all pigments. These facts are well known to most pigment buyers, but they may be less obvious to pigment manufacturers. In my presentation, I shall highlight the commonalities and dissimilarities between the different individual pigment markets. I will also present a recap on some of the major recent events in the industry, such as corporate mergers and acquisitions.
To provide context when looking at the market situation for white, black and colour pigments – past, present and future – it is vital to begin by sketching out the background of global economic and geopolitical trends. Undoubtedly, the Covid-19 Pandemic was the single most important factor affecting all economies and all industries over the past two years. Recognising that this was a potentially fatal and highly transmissible virus, governments almost everywhere imposed lockdowns with varying degrees of severity and then enacted fiscal and monetary measures aimed at encouraging economic recovery. World GDP dropped by 3.1% in 2020, but then bounced back by 6.1% in 2021. There were several surprises, some pleasant, others much less so. Demand for certain products increased strongly: notably DIY products, architectural paints, packaging (for on-line retail), and healthcare plastics, rubber and textiles. Normally, trends in pigment consumption growth are aligned to trends in GDP growth. But in 2020, during the worst recession since the 1930s, global pigment demand was booming!
There were more surprises in 2021/22. Ocean freight rates on all routes soared, especially for the 20-foot containers that are commonly used for pigment export shipments. Extreme weather events (floods and hurricanes) in North America and political disturbances in parts of Africa caused supply shortages and price spikes for acids, chloralkalis and non-ferrous metals. The prices of oil and natural gas also rose steeply, affecting not only energy costs but also the costs of the petrochemical feedstocks on which manufacturers of organic pigments, paints and plastics depend. In Europe, these problems became even more acute following the Russian invasion of Ukraine towards the end of February 2022.
Inevitably, raw material shortages and rising costs led to upward pressure for pigment pricing. On top of that, the spectre of general price inflation – a decline in the value of money – reappeared: CPI rates for the US dollar and for the €uro are heading towards double-digit percentages, levels not witnessed since the early 1980s. Of course, an upsurge in price inflation was an unsurprising corollary of the liquidity pumped into the monetary system during the Pandemic. But future Government policies designed to address the problem of inflation could have a critical impact on pigment demand growth over the next few years.
The industry's existential challenges are also assuming greater importance. For example, legislation on labelling paint and other TiO2-containing products, based on its classification as a Class 2 carcinogen, took effect at the beginning of October 2021. Biomedical data that was used to support legislation against TiO2 could equally support similar legislation against other poor-solubility low-toxicity (PSLT) substances, embracing all pigments in powdered form, as well as fillers, extenders, flame-retardants and other additives. Growing awareness of the climate change crisis presents another major challenge. Pressures to find new methods to drastically reduce the carbon footprint when making and using pigments are bound to intensify.
Having regard to these existential challenges, as well as the perpetual requirement to hold down costs and improve product performance, scientists in both academia and industry have proposed a number of solutions. I will aim to highlight some of the most promising innovations and technological advances. The final section of my presentation will be devoted to speculating what the world of TiO2 and colour pigments might look like in 2030.
In a word: unpredictability. Or in two words, perhaps more appropriate for the Colour Science audience: Black Swans – unpredictable events that are beyond what are normally expected and that have potentially severe consequences.
The world has seen a lot of Black Swans in recent years, including: the imposition of punitively high US tariffs on many imported Chinese products (including pigments); the extent of Covid-inspired lockdowns around the world, limiting citizens' movement and social interaction so as to prevent healthcare systems being overwhelmed; supply-chain disruption; the resurgence of price inflation; the advent of war in Ukraine and the deliberate disruption of trade. In order to survive and thrive, business managers need to have flexible plans that can be quickly modified in the light of suddenly changing circumstances.
It is always somewhat invidious to try and pick winners in this context, but to give you some sort of answers to your question, I would suggest the following:
In the TiO2 domain: pigment manufacturing processes that promise a much lower carbon footprint than conventional sulphate and chloride technologies (TNG, Largo, et al.); composite white pigments with TiO2 particles encapsulated in lower-cost inorganic whites, aimed at maximising the price-performance ratio (FP-Pigments, Chemours, et al.); delivery of TiO2 pigment as slurries or granules, aimed at minimising dust losses and improving worker safety; new methods for processing complex titanium-vanadium-magnetite minerals, so as to yield cheaper feedstocks.
In the colour pigment domain: new chromaphores (Shepherd); new effect pigments (Schlenk, Kuncai, Merck, et al.); new manufacturing processes, aimed at reducing the carbon footprint (Lanxess); and bio-based colorants, as replacements for synthetics in cosmetics and food (EQT/Hansen, Givaudan, Sun Chemical, et al.).
This year's Amsterdam conference, like the previous Smithers' conferences in this series, will no doubt be a good venue to showcase a lot more interesting innovations in white, black and colour pigments, in process plant and equipment, in manufacturing technologies and in feedstocks.
It has been three years since the last European Pigment & Colour Science and TiO2 World Summit conferences were held. There have been a lot of changes in the industry since then - new products, new or sustainability enlarged supplier and customer companies, new people... It will be a great opportunity to catch-up on all the news, to see old friends again and to welcome newcomers to this fascinating industry.
After graduating in Chemistry & Economics from Birmingham University, Reg Adams began his career at Amalgamated Metal and was later seconded to English China Clays (now Imerys), where he wrote his MBA thesis on company growth. At British Sulphur (now CRU) during the 1970s, he edited a range of publications on industrial chemicals and fertiliser raw materials. His first book Titanium & Titanium Dioxide (ISBN 0903199793) was published by Financial Times Business Books in May 1984. His seventh and most recent book Titanium Minerals: Global Industry, Market & Outlook (ISBN 9781910922088) was published by Roskill in August 2016.
Reg Adams has also been retained as an expert witness in matters of commercial litigation or investment scrutiny and he has been commissioned as a speaker at more than 60 international conferences, including each of the TiO2 conferences hosted by Smithers (and predecessor companies) since 1992. He has also chaired a number of conference sessions. His company - Artikol (founded in 1977) - specialises in market intelligence and publishing on mining and chemicals. Drawing on Artikol’s extensive information database, Reg Adams compiles and edits the monthly bulletin Focus on Pigments and the quarterly TiO2 Worldwide Update.