The fate of marine coatings in terms of demand growth and prices will at all times be finally decided by how well seaborne trade in commodities and manufactured items such as automobiles and machinery performs. To a much lesser extent, the working of the global oil and gas industry will also have a bearing on marine coatings, for all offshore structures need the same kind of protection as vessels of all types — ships carrying cargoes, cruise ships and naval ships. A global glut of shipping capacity is the order of the day as new bigger and highly efficient vessels are coming online alongside the existing fleet. According to the World Trade Organization (WTO), growth in the volume of world trade is likely to remain sluggish in 2016 at 2.8%, unchanged from the increase seen in 2015. Imports of developed countries should moderate this year while demand for imported goods in developing Asian economies should pick up. However, economists with the WTO (World Trade Organization) expect global trade growth to rise to 3.6% in 2017.What is to be considered is that trade growth last year

The fate of marine coatings in terms of demand growth and prices will at all times be finally decided by how well seaborne trade in commodities and manufactured items such as automobiles and machinery performs. To a much lesser extent, the working of the global oil and gas industry will also have a bearing on marine coatings, for all offshore structures need the same kind of protection as vessels of all types — ships carrying cargoes, cruise ships and naval ships. A global glut of shipping capacity is the order of the day as new bigger and highly efficient trailed world economic growth of 3.1%, extending a depressing trend in the world economy. Before the 2008 financial crisis that wrought major damages to the world economy, global trade grew at rates double the global output for decades. Since 2011, however, trade growth started declining to finally slide below the broader growth of the world economy.

From the Bank of England Governor Mark Carney to International Monetary Fund economists, everyone is saying as the world remains trapped in low growth and low interest phenomenon, the US, the European Union and China will have to do a lot more to change the economic outlook. In the grimness overtaking global trade, it is only likely that the Baltic Dry Index, which is a measure of international trade in bulk commodities, will stay low. The Index that hit an all-time low in February has now stabilized at higher levels. But freight rates are still not high enough to bring cheer to shipping companies. Their earnings being impacted by low freight over very long periods, they remain prone to postponing ship maintenance and repairing. As a result, the demand for marine coatings from dry docking is impacted.

Dry docking ship maintenance takes place in many parts of the world, marine repairing being linked to owners’ locations. Even then China and South Korea have a dominant presence in dry docking. What about orders for new ships, the building of which generates maximum demand for marine paints? Recently, an official of Hyundai Heavy Industries, one of the world’s largest shipbuilders said:“It is difficult to get new orders amid slowing global trade...Things are unlikely to get any better this year with the global economy still in the doldrums.” A paints industry official quoting from a report by shipping market service provider Clarksons Group says that the order backlog for Daewoo Shipbuilding and Marine Engineering’s Okpo shipyard numbers 118 vessels amounting to 7.82m compensated gross tonnage (CGT). This happens to be the largest backlog for a single shipyard.

The paints industry’s hope is that by the time order backlogs with the world’s major shipyards get sufficiently cleared, the global trade outlook will improve giving confidence to shipping companies to once again start placing new orders for ships in good numbers. A silver lining for paints manufacturers is that special shipyards continue to receive orders for luxury cruise vessels of very large capacity and yachts. New orders for naval ships are also coming in good numbers. Low oil pricesresulting from production spurt in the US and Saudi Arabia led the Organization for Petroleum Exporting Countries (OPEC) stubbornly refusing to curtail production are the reason for oil companies holding back investment in offshore exploration and drilling. To the relief of producers of marine coatings, orders from natural gas facilities and floating production and storage and offloading (FPSO) units have picked up well in recent years.

Even while the global marine coating business is worth a few billion dollars, this segment in the overall paints industry occupies a niche position. This is because the technology in application in the area is highly demanding. Moreover, to keep pace with the requirement to keep see water pollution free so that marine life is not harmed, paints manufacturers invest heavily in R&D on a continuing basis. Environment regulations becoming stricter across the globe are the key reason for marine coatings manufacturers to be technology-driven. It is now compulsorily required of coating formulators in some countries to reduce solvent content in marine coatings.

While North America and Europe already have well- established legislation on the kinds of coatings to be used in ships and offshore rigs and platforms, emerging nations are fast catching up. An AkzoNobel official is quoted as saying: “This is particularly true when it comes to the restrictions in use of certain biocides and the push towards low or no VOC (volatile organic compounds) products. Countries like China and Korea are starting to adopt regulations that are similar to those in Europe and the US. As a global supplier of coatings, we are aware of the demands these regulation place on our products — the need for non-biocidal and low VOC products.”

Industry watchers say the practice with AkzoNobel and some others is to formulate products anticipating the changes in environmental regulations. They also see in this kind of challenge significant opportunities. Claiming leadership in biocidal products compliance under all regulations, the Akzo Nobel official says “we are staying ahead of the curve by developing non-biocidal products too.” The challenge here is to stay ahead of new legislative restrictions. Marine coatings allow ships and oil structures to withstand damages that saline sea water inflicts on metals by way of oxidization, corrosion and staining. They also provide protection against fouling of ship structure, particularly below the waterline. The side of a ship hull exposed to sea water without anti-fouling coating will gather unwanted organisms within a minute, slowing down the vessel’s cruising speed and raising fuel consumption.

To the relief of governments and environmentalists, the paints industry is making significant strides in developing highly effective fouling protection products. An official of PPG Industries said: “The long-term trends are towards more environment friendly fouling protection products that provide superior performance.

The focus in recent years for marine coatings is on achieving fuel and product performance efficiency leading to reduction in maintenance costs.” Some major technologies in the area are oriented towards combining silicone with low content biocides. International Paint of AkzoNobel group has introduced the first biocide-free fouling control coating featuring unique patented slime release technology that combats micro fouling on ships’ hulls, maintaining performance throughout the docking cycle.

The latest innovation in the company’s Intersleek range claims to deliver outstanding macro and micro fouling control with improved static resistance, even in warm waters and is suitable for slow steaming. Slime that does build up during static periods is released by the movement of the ship through water. As a result vessels achieve reduced drag, improved fuel efficiency and reduced CO2 emissions. The new patented fluoropolymer in Intersleek®1100SR has been developed by enhancing the slime resistant polymer groups used in earlier generations of Intersleek®. The tailored surface chemistry of this new technology specifically influences and resists the adhesion and settlement of organisms that make up slime colonization.

International Paint’s Interline 9001 is a new bimodal epoxy coating for cargo tanks of chemical tankers. The coating is designed to deliver greater efficiency and flexibility allowing easy switching from one cargo to the next with minimum downtime. The best feature of Interline 9001 is that it has over “60% fewer cycling restrictions.” In keeping with the demand of present difficult times, paints manufacturers are introducing products which will allow ships to cut operating costs. To give one example, Hempel Group of Denmark has added in its offerings an anti-fouling product Hempaguard, which promises to reduce fuel consumption of vessels by 6% compared to conventional anti-foulings and therefore, their carbon footprint. In the market since 2013 end, Hempaguard continues to gain in popularity. The same year saw Hempel introduce its high-solids anti-fouling products such as Globic 6000 and Globic 9000. The other industry leaders continue to enrich their product portfolios with three principal objectives — reduce operational costs of ships, give protection to marine environment and optimize energy conservation.

The pricing of marine coatings has become important as margins of shipping groups remain under pressure due to continuing low freight rates. Resistance to price revisions has made it necessary for paints companies to work closely with suppliers of raw materials that includes bringing them on board to keep them abreast of breakthroughs in technologies. Paints industry officials say they try to maintain stability in prices. But there are occasions when paints price increases become unavoidable. According to a report by Transparency Market Research, global marine coatings market will register a compound annual growth rate (CAGR) of 6.5% to become $11.88bn by 2020 from $7.65bn in 2013. As the shipbuilding industry is highly concentrated in China, South Korea and Japan with shipyards in Europe and the US concentrating on very high end vessels building, paints manufacturers will have their sights focused on Asia.