Raw materials – coating prices – inflation: micro-thoughts at the end of 2021

prezzi vernici

In April of this year we had imagined a scenario of increases in the prices of raw materials ( “ Perfect Storm – Raw Material Prices” – Icro )and, consequently, of coatings, not far from what then happened: an increase from 15% to 25% depending on the specific lines of coating products. Just to partially cover the cost increase.

In September, the expected cost decrease did not take place. Not only that, new shortages of primary raw materials for the sector, significant increases in the costs of energy, packaging, maritime transport and other items.

We perceive a concern of our customers to which we always respond with all the most punctual information possible, because the sharing in the supply chain of the burdens of this situation is the only long-term oriented attitude. Speculations on the situation, i.e. risky incursions into the market or excessive mark-ups, do not interest professional operators, perhaps on the market for more than 70 years as ICRO.

Among the most difficult issues of the moment that of titanium dioxide is particular: production capacity is currently limited, demand is growing, without new investments it is very likely that the prices of titanium dioxide pigments, therefore almost all pigmented products, will increase more than the rate of inflation, whatever it is. In addition, the labelling, which considers the Ti02 classification as a class 2 carcinogen and the estimation of CO2 equivalent emissions per kg equal to 5kg using conventional sulphate or chloride processes, create instability around the product in addition to the search for new production methods or possible partial substitutes. In short, “a titanic storm”.

For oil derivatives, the price will moderate in 2022 but remain at high levels until 2023. We hope that speculative attitudes of declared force majeure will be significantly reduced, compared with excessive frequency during these two past years since the beginning of the pandemic.

In summary, until June 2022 we will suffer in our supply chain, but even greater challenges await us and we will talk about them on a second occasion.

December 3, 2021

Andrea Moltrasio

C.E.O – President