Oil derivative prices surge, paint companies intensify price adjustments

Gelonghui, March 24 | According to CCTV Finance and Economics, international oil prices have surged recently, putting pressure on downstream paint companies’ costs. Since crude oil accounts for more than 40% of paint costs, paint prices are closely linked to oil prices. Rising crude oil prices have driven the rapid increase of prices for petroleum-derived solvents, resins, additives, and more. Taking epoxy resin—the main raw material for paint—as an example, its price has risen from 14 yuan per kilogram to 20 yuan, showing a significant increase; many companies, to control costs, have had to reduce their raw-material purchasing and inventory. In the face of a “runaway” rise in raw-material prices, more than 20 key companies in China’s paint industry have issued price-adjustment notices in quick succession, covering all categories such as architectural coatings and industrial protective coatings. However, downstream acceptance of price increases within the paint industry is clearly split: areas such as home decoration and automotive have a higher tolerance for price hikes, while traditional industrial sectors are relatively more sensitive to price increases. Industry insiders say that in the future, the paint price trend will still depend primarily on oil prices in the short term. As the cost shock continues, paint prices in the coming period may be more likely to rise than to fall.