Published October 2015
The worldwide pigments industry produces hundreds of colorant, extender and functional pigments for a wide spectrum of industrial and consumer markets.
The migration of the pigments business to Asia, particularly China and India, continues. Since the mid-1990s, production in China and India has rapidly increased; China is now the world's largest organic color pigment producer, especially for commodity-type pigments. Additional medium-tier to higher-value organic pigments may also migrate to China from North America, Europe and Japan. Production in Europe, the United States and Japan continues on a downward trend as the market has become globalized and gross margins have been squeezed, leading to plant shutdowns and restructurings. The volume of unfinished pigments imported to North America, Western Europe and Japan for finishing continues to decrease as more finished pigment is imported from China.
The following pie chart shows world consumption of organic color pigments:
Globally, printing inks account for 55–60% of demand, coatings about 20%, plastics about 15% and other industries such as textiles for the remainder. The printing market for publication of newsprint and periodicals has fallen as a result of competition from the internet, but demand for printing inks for packaging remains strong. The next-largest market is coatings for automotive production. After bottoming out in 2009, global vehicle production started to rise again in 2010 and increased at a rate of about 4% annually during 2010–14. It is expected that global consumption for organic pigments will increase by 2.8% per year from 2014 to 2019.
By pigment class, 50–55% of the world value share is azo pigments; phthalocyanines (blue and green) have a 20% share. High-performance and other pigments account for the remaining 25–30%. The classic azo and phthalocyanine pigment groups are characterized by lower profit margins as a result of rising competition from lower-priced imports, while the high-performance pigments group typically retains higher margins.
Overall growth in the United States and Europe is expected to be around 1–2% per year on average between 2014 and 2019, as the long-term trend in using inks for newspapers and publications continues downward owing to competition from electronic media and devices. However, consumption of organic pigments for colored inks is expected to grow somewhat as a result of greater production of advertising leaflets and catalogs, and for packaging. Use in automotive and other coatings is expected to show above-average growth. In Japan, growth is expected to remain flat, while growth in China and India will be about 5% per year due to increasing demand for inks and coatings.
China is the principal global supplier of red and yellow azo-based pigments and their intermediates. India is the principal global supplier of blue and green phthalocyanine-based pigments and their intermediates.
The ink industries in North America and Europe have become largely dependent on Asian supplies of raw materials and pigments. In recent years, there have been supply disruptions of certain pigments leading to sharply rising prices for some pigments.
Supplies from China have been disrupted for several reasons, among which are the following:
- Exports of pigments from China have been subsidized by the government in the past, but authorities have removed many subsidies to encourage domestic Chinese consumption, and are now taxing some exports.
- A number of smaller Chinese producers have been put out of business because of government crackdown on polluters.
- The implementation of REACH has negatively affected exports to Europe.
It is likely that supplies will be subject to more fluctuations in the future. The environmental practices of Indian producers will likely come under more scrutiny from governmental authorities, which could result in closures of many small, noncomplying producers.