- Strait of Hormuz blockade hits paints and solvent supplies
- A major paint company increases thinner product prices by 75%
Japan Metal Daily: The escalation of tensions in the Middle East has led to an unexpected situation of supply instability of paints and solvents, not expected in normal times, and this has spread to the domestic steel market which has finally begun to show signs of revitalisation towards demand recovery. Specifically, it has a negative impact on stagnation of shipments of products (processed products) that require painting.
There are many cases where steel products are painted for the purpose of preventing rust, ensuring durability and weather resistance of steel structures such as building steel frames, bridges, shipbuilding, and plant equipment, and improving appearance design. The same applies to construction and industrial machinery, automobiles, and vehicle parts. Paint is mixed with thinner as a diluent. Thinner dilutes the viscosity of the paint, making it easier to paint, and beautifies the finish, and also plays a role as a cleaning solution for brushes and rollers.
Naphtha supply hindered
The paint thinner is currently in short supply and difficult to obtain. This is because the supply of naphtha, a petrochemical raw material, has been hindered due to the de facto blockade of the Strait of Hormuz due to the tense situation in the Middle East, and it is directly hitting the Japanese market, which is highly dependent on imports from the Middle East.
In response to the shortage of naphtha supply, chemical manufacturers, paint manufacturers and paint companies have declared force majeure one after another since mid-March. A major paint company announced a 75% increase in the price of its thinner products from mid-March compared to before, and other companies also told their suppliers that all types of paints made in-house from April would be 50% of last year’s average shipment as the upper limit of sales volume because the petrochemical manufacturer was unable to procure naphtha. This trend is also spreading to small and medium-sized enterprises.
Coated shipments may stagnate
This is the cause, and the steel and metal industries that require painting are also being affected. If the procurement of paints and thinners is delayed due to a shortage of naphtha, it will hinder the painting work in the post-processing and manufacturing process of steel, bridge parts, and shipbuilding parts, and shipments will stagnate.
Still, many sites have a certain amount of paint in stock, but on the other hand, thinner is relatively inexpensive and easy to procure, so spot purchases are the mainstream. Many sites do not have enough stockpiles, and if they suddenly can’t buy, they may panic.
It is a direct impact on the primer (painting) line in the production of thick plates by steel manufacturers, the shot and primer industry for shipbuilding scattered in the Kyushu and Setouchi areas, and the can industry for construction machinery and industrial machinery with steel frame fabricators and painting processes.
The article is published as part of an article sharing agreement between Japan Metal Daily and BigMint
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