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The powder coating industry in China has grown significantly, with over 2,000 enterprises operating last year. The sector produced more than 400,000 tons of powder coatings and generated sales revenue of 8 billion yuan. This year, production is expected to exceed 500,000 tons, with sales revenue projected to reach 10 billion yuan. Epoxy resins and polyester resins are the two main raw materials used in powder coatings, accounting for over 60% of the total cost.
In recent years, the rising price of crude oil has led to increased costs for key raw materials like epichlorohydrin and bisphenol A, which are essential for epoxy resins. Similarly, the prices of polybasic acids and polyols—important components in polyester resins—have also surged, directly pushing up resin prices. As a result, manufacturers have faced significant cost pressures, which have been passed on to powder coating companies.
However, due to intense competition and a fragmented market, many companies have been unable to raise their product prices significantly. Some smaller producers have attempted to cut costs by reducing the use of epoxy resin and increasing the proportion of polyester resin in their formulations. Others have adopted non-standard methods to remain competitive. These practices have not only damaged the reputation of powder coatings but have also reduced demand for epoxy resins. Industry experts have therefore urged the sector to accelerate integration and restructuring, improve overall standards, and move toward large-scale, standardized operations that align with market demands. The goal is to position China as a major global player in both production and consumption of powder coatings.
This year, despite the sharp rise in international oil prices, the prices of epoxy and polyester resins have remained relatively stable. Moreover, the overall output of epoxy resins has increased, with large-scale enterprises operating at full capacity. For example, Bluestar New Material Wuxi’s resin plant produces and sells around 3,000 tons per month. This situation presents a favorable opportunity for the powder coating industry.
Experts believe that 2005 is a critical year for China’s powder coating industry. If the sector unites through an industry association, it can combat the chaotic low-cost competition caused by market fragmentation. By offering high-quality products and gradually raising prices to a reasonable level, companies can ensure financial stability and seize the growing opportunities ahead. With proper strategies and cooperation, the industry is well-positioned for substantial growth in the coming years.
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