Sustainability theme permeates European Coatings Congress

FOCUS ON P I G M E N T S A MONTHLY REPORT FROM REG ADAMS

AUGUST 2013

SUSTAINABILITY THEME PERMEATES EUROPEAN COATINGS CONGRESS

In this issue

MARKETS 4-6 Will the latest posted increases really move TiO2 market prices upwards? Chinese customers spent Rmb 36 bn on 2.3 M tonnes of pigments, according to GCiS PLANTS 6-7 Phillips Carbon Black upgrades pollution control measures at Palej (India) plant Cabot takes 100% control of Mexican carbon black plant Solvay Rhodia starts building a new HDS plant in Poland COMPANIES 7 Kingfa – world’s largest plastics compounder – moves into India with its purchase of Hydro S & S Industries Schulman drops bid to buy Ferro but is now looking for alternative acquisitions EVENTS

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AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS IN THE PIGMENTS SECTOR ISSN 0969–6210

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The European Coatings Show, held every two years at the Nürnberg Messe complex, is a huge event by any standards. This year, there were nearly 26,000 visitors over four days, with a record number of exhibitors (962), occupying nearly 3.5 hectares of display space. The Congress, held in the same complex at the same time, attracted 651 delegates from 38 different countries. As a prelude, there was a series of 11 separate tutorials on the Sunday afternoon (17 March), devoted to discussing the fundamentals of various topics – architectural paints, led by Dr Christian Schaller (of Sto AG); polyurethanes, led by Mr Simon Waddington (a Zurich-based consultant, formerly with Dow Chemical); anti-corrosion pigments, led by Dr Lars Kirmaier (of Heubach); easy-to-clean paints, led by Prof Bert de With (of Eindhoven University); flame retardants, led by Dr Adrian Beard and Dr Daniela Eisenhauer (of Clariant): plus six others. The conference opened on the Monday morning with a plenary session featuring two papers on the theme of “sustainability” in the manufacture and application of paints. Dr Klemens Bartmann (of DuPont Performance Coatings) said: “A smaller carbon footprint, emissions reduction, lightweight capability and process consolidation can all lead to improved sustainability, but these considerations can also create additional production complexities and costs. Dr Aditya Ranade (of Lux Coatings) highlighted the findings of

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his company’s study involving interviews with industry stakeholders and reviewing Government regulations and patent literature. Sustainable technologies should reduce energy, resource and environmental impacts, but they often get confused in the public’s mind with “greenwashed” unsustainable alternatives. For example, should higher-VOC paints based on nitrocellulose, derived from renewable raw materials, count as “sustainable” paints? Do longer-lasting 2-K polyurethane coating systems qualify as “sustainable?” Dr Ranade cited as good examples of sustainable technologies: Evoque pre-composite polymers (from Dow Coating Materials), which improve the dispersion of TiO2, facilitating pigment savings of up to 20%; E-Barrier paints (from Sherwin-Williams), reflecting radiant heat so as to keep building interiors cooler and thus save on the energy costs associated with operating air-conditioning systems; and Ecoclean paints (from Alcoa), which incorporate photocatalytic TiO2 and therefore help to repel dirt and clean up the ambient air by denitrification, when applied to aluminium sidings. After the plenary session for all delegates, the audience split into six parallel sessions for the rest of Monday and for the whole of Tuesday. Altogether, there were 25 sessions and nearly 150 presentations. The theme of sustainability was central to several presentations, with particular reference to minimising harmful

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FOCUS environmental impacts, such as volatile organic chemical (VOC) emissions, and maximising the use of renewable resources. In the architectural paint sessions, Ms Catarina Ralheta (of Resinas Quimicas) gave a good overview of the ecological potential for new resin binders in both water- and solventborne architectural paints; Mr Maurille Sécher (of Omnova) spoke about new resin binders for low-exudation waterbased masonry paints; Mr William Arendt (of Emerald Kalama) spoke about the use of low-VOC dibenzoate blends; Mr Jean-Pierre Disson (of Arkema) spoke about a non-VOC neutraliser and codispersant for aqueous paints; Mr Ayaz Khan (of Solvay Rhodia) spoke about effective functional additives for zero-VOC paints; Dr Arjun Sau (of Ashland Chemical) spoke about a new rheology modifier for zero-VOC paints; and Mr Carlo Testa (of Eastman Chemical) spoke about low-emission coalescents. In the session devoted to biobased coatings, Mr Bas Van Leeuwen (of Purac) discussed sugar-derived ingredients for polyester paints and other speakers discussed the use of renewable resources for polyurethane paints, including: Ms Jasmine Bullermann (of Synthopol); Mr Joel Neale (of Perstorp); Dr Stefan Friebel and Dr Claudia Philipp (of the Fraunhofer Institute for Wood Research); and Mr Hans-Georg Grablowitz (of Bayer). In the forward-looking session titled ‘Science today, coatings tomorrow’, Prof Andreas Fery provided a useful guide to the study of bioactive surfaces, indicating the potential for formulating paints using responsive nanoparticles. In the session devoted to weathering tests, the importance of life-cycle analysis (LCA) as a tool for assessing the overall environmental impact of paints and paint raw materials was highlighted by several speakers. Dr Andrea Capra (of Momentive Specialty Chemicals) presented a paper on the use of LCA in research on new binders for powder coatings. Dr Steve Ashdown (of Huntsman Pigments) discussed weathering studies for TiO2-containing paint systems. Ms Ingrid Bloss (of Zehnter) presented a helpful comparison of methods for the

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quantitative determination of the chalking phenomenon that occurs as an ageing effect of certain types of paint. Besides the sessions already mentioned above, the conference also featured sessions devoted specifically to: automotive paints, epoxy coatings, insulating paints, wood coatings, protective and corrosion-inhibiting coatings, waterborne paints, radiation curing, printing inks, adhesives and sealants, construction chemicals, dispersants and surfactants, polyurethanes, functional additives and nanotechnology. There was no session titled ‘Pigments’ this year. Instead there was a session titled ‘TiO2 utilisation’, with presentations by speakers from TiO2 suppliers (Huntsman and Cristal) being outnumbered by presentations from non-TiO2 suppliers. The latter highlighted the financial savings that can be made by reducing TiO2 usage in an era of rapidly escalating TiO2 pigment costs. In his introductory remarks, Mr John Haigh (of Dow Chemical) said: “Hollow-sphere pigments have become a standard raw material in the paintmaker’s toolbox, bringing the ability to formulate cost-effective highquality paints across the full palette.” These pigments – of which Dow’s Ropaque are the most popular examples – have a water-filled polymeric shell in their typical delivery form. After application of paint containing the pigment, the encapsulated water evaporates as the paint dries, resulting in an encapsulated airfilled void, which provides the lightscattering and opacifying effects. The manufacture of a Ropaque pigment involves first preparing an acid-rich core polymer containing monomers such as acrylic acid or methacrylic acid, followed by the preparation of a hard low-acid shell polymer, with the final step being neutralisation of the dispersion to swell the core polymer. The key parameters affecting the performance of the final pigment are: the void fraction, particle size, shell composition and the type of base used. The first commercially successful Ropaque pigment produced for the paint industry had a particle size of 0.5 microns (external diameter) and a void fraction of about 20%. The focus of subsequent

research efforts was aimed at increasing the void fraction so as to improve the opacifying effect. Stateof-the-art Ropaque pigments today typically have an internal void fraction of 45%, with a particle size of 0.4 microns. To date, the main end-use sector for hollow-sphere pigments has been the waterborne architectural paints sector. For most applications, the customer wants a hollow-sphere pigment which does not collapse, but in certain specific applications, such as leather finishing, controlled collapse can actually provide performance enhancements. Understanding how to control hollowsphere collapse under friction and pressure has enabled Dow to develop Ropaque pigments which are burnishresistant, ie gloss changes are minimised on rubbing. Dow has also been focusing on the packaging inks sector. Conventional white flexographic inks for packaging applications often have TiO2 contents of 35-50% (by weight) and the loss of light-scattering efficiency as a result of particle crowding becomes a problem. Opacity is driven by the thickness of the coating rather than by the weight, but prices of printing inks are typically quoted per kilo (as distinct from paint prices, which are quoted per litre). Therefore, it is pertinent to look at the volume of ink consumed per surface area printed: this is often referred to as “mileage.” White printing inks containing high levels of hollowsphere pigments have been shown to give up to 20% more mileage, compared against conventional inks containing TiO2. Because of the lower abrasivity of hollow-sphere pigments, there is much less wear on the doctor blades. Mr Haigh also discussed recent research efforts to develop new types of hollow-sphere pigments for direct thermal printing (where the “ink” is contained in the substrate to be printed), for solvent-borne paint systems and for solar-reflective coatings. Ms Francine Signoret (also of Dow Chemical) discussed another of her company’s technologies – pigment encapsulation technology (PET) – for reducing TiO2 pigment consumption. Dow has developed a new range of pure acrylic polymers, which act as both hiding enhancers and as binders.

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F O C US During paint formulation, the polymer surrounds and reacts with the surfaces of individual TiO2 particles through a series of adsorptions. As more polymer particles adsorb, the TiO2 surface becomes increasingly saturated and the result is a pigment/polymer composite. The minimum level of adsorbing polymer to ensure optimal composite formation is 35% greater than the TiO2 content (by weight). As the paint film dries, the pigment/polymer composites come together to form a film, but the TiO2 particles are prevented from close contact with one another because each one is encased in polymer. This means that the TiO2 is more evenly dispersed and therefore the same degree of hiding power can be achieved with a lower TiO2 dosage. Also, the paint film is more homogeneous and this leads to improved durability, especially in exterior paint applications. Chalking and efflorescence resistance, gloss and colour retention are also improved. Dr Anabelle Legrix (of Imerys) discussed the use of mineral extenders in low-PVC (pigment volume concentration) paint formulations. Methods of TiO2 extension in high-PVC matte paints are well established, but with low-PVC paints the main challenge is to avoid excessive gloss reduction. Dr Legrix presented a set of experimental results for various formulations with kaolin or calcium carbonate extenders. Her results show that specific mineral morphology is important and that platy kaolins can provide significant opacity benefits in high-TiO2 gloss paints. There is an absorption contribution, as well as a viscosity effect. An increase in surface roughness also contributes to improved opacity, especially at higher PVCs. She said: “Cost-performance benefits could be attained by replacing some paints currently containing TiO2 plus ground calcium carbonate with alternatives containing less TiO2 plus kaolin.” Ms Olivia Persyn (of Solvay) highlighted the benefits of her company’s nanoparticulate precipitated calcium carbonate (PCC). Whereas conventional PCC is scalenohedral, the morphology of Solvay’s nanoPCC essentially

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consists of very fine fibres of calcite in pseudospherical shapes within a microshell structure. Up to 60% of the TiO2 in a standard emulsion paint can be replaced with nanoPCC, with no adverse effects on opacity, mechanical resistance, gloss or rheology. This degree of substitution enables the paintmaker to realise cost savings of around 40%, at the same time as achieving an 80% reduction in the paint product’s overall carbon footprint. Batting for the TiO2 industry, Mr Mike Binns (of Cristal Global) referred to a study by the Titanium Dioxide Manufacturers Association (TDMA) in which the baseline industry average carbon footprint was assessed at 5.2 kilos of CO2 emitted per kilo of TiO2 pigment produced. Mr Binns supported his argument that “white is the greenest colour” by referring to the energy savings achieved thanks to lower internal lighting requirements for buildings with white or light coloured walls and thanks to the infrared reflectance of roofs painted white. He presented various experimental results for satin-finish, alkyd gloss and acrylic gloss white paints. In his conclusions, he said: “The optimum TiO2 loading for the lowest carbon footprint is higher than the normal maximum levels found in commercial paints. This suggests that increased (rather than decreased) TiO2 loadings could be a better route towards lowering the overall carbon footprint burden of painting a surface white! Our work demonstrates why it is so critical to include the performance of a coating in any evaluation involving the carbon footprint. This principle also applies to paintmakers looking to set sustainability improvement goals. Setting targets on the reduction of total carbon footprint or on the average carbon footprint per litre of paint might initially seem a responsible action, but any progress towards such goals at the expense of quality will be very misleading.” Six years ago, at the Nuremberg Congress 2007, Dr Scott Wright (of Huntsman) presented a paper outlining the concept of granular TiO2 pigments. Soon after that, Huntsman launched the Deltio range of freeflowing TiO2 pigments designed as alternatives to its conventional dry powder Tioxide-branded pigments.

(See also ‘Focus on Pigments’, Dec 2008, 7). At this year’s Nuremberg Congress, Dr Emma Cordiner and Dr Brian Noble presented an update on Huntsman’s granular pigments. They noted: “The physical properties that make TiO2 a supreme white pigment also give rise to its handling and processing problems. The very small crystal size means that the Van der Waal’s attraction between the crystals is strong, so the pigment is inherently cohesive in nature, sticking both to itself and to any surfaces it encounters. Customers can experience difficulty in handling and offloading the pigment, which can cause bottlenecks in their processing. The poor flow can lead to inconsistent metering of the powder and associated quality defects in the final pigmented product. The real advance (by Huntsman) is that a unique manufacturing process has been developed that produces free-flowing binderless pigments that can be used in all applications where conventional TiO2 pigments are used.” Customers using Deltio pigments report a wide range of benefits. Tanker discharge and offloading times have been cut from three hours to one hour. Discharge times from hoppers have improved threefold. Equipment cleanup times have been reduced by over 30%. Energy consumption on key pieces of energy-intensive mixing equipment has decreased by as much as 16%. Metering consistency has been improved by more than 50% and wastage has been reduced thanks to the improved mass-transfer of granules, as compared against powder. Other papers presented at the Nuremberg Congress that may be of specific interest to readers of ‘Focus on Pigments’ covered: bismuth vanadate in polyester coatings, by Dr Zeki Acar (of Cappelle); Altiris TiO2 pigments for solar-reflective coatings, by Dr Rob Portsmouth (of Huntsman); micronised grades of micaceous iron oxides, by Mr Michael Klinar (of Kärnter Montanindustrie); Boruvit and muscovite mica as anti-corrosion pigments, by Dr Andreas Götz (of Ziegler & Co); zinc metal powders as anti-corrosion pigments, by Dr Dirk Van Genechten (of Umicore); TiO2, with a phenyl dimethyl siloxane surface treatment, for use in

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FOCUS hydrophobic coatings; zinc-free anticorrosion pigments, by Dr Lars Kirmaier (of Heubach); and sepiolite to enhance the photocatalytic activity of TiO2 in self-cleaning and deN0x applications, by Dr Antonio Esteban (of Tolsa). Reg Adams

For further details on the European Coatings Congress at Nuremberg, Germany (17-19 March 2013), including copies of the conference papers, please contact: Mr Matthias Janz, Vincentz Network, PO Box 6247, D-30062 Hannover, Germany. Tel: +49 (0)511 9910274. Fax: +49 (0)511 9910279. E-mail: [email protected]

MARKETS Will the latest posted increases really move TiO2 market prices upwards? ICIS recently published a review of US TiO2 pigment prices over the past five years. From $1.06 per pound (on a free delivery basis) in July 2008, the average realised selling price had increased to $1.18 per pound by November 2008 and then remained at this level for next 12 months. In retrospect, this was quite a remarkable achievement, given that North American TiO2 consumption fell by about 25% during 2009 and world consumption fell by 9.4%, as a consequence of the prevailing global financial crisis. From $1.18 per pound at the end of 2009, the US price rose in a series of quarterly steps, by $0.03-0.05 each time, reaching $1.47 per pound by 2Q 2011. Faced with soaring feedstock costs, the major TiO2 pigment suppliers became much bolder with their new pricing declarations, seeking increases of $0.15-0.25 per pound. They were also more successful than usual in actually achieving most, if not all, of the declared price increases. After June 2011, the upward steps in the ICIS five-year chart are shown as larger and closer together than before. From $1.47 per pound in June 2011, the US price increased by $0.15 in early July, then by another $0.10 in midSeptember, then by another $0.15 in mid-October and then by another $0.10 in early February 2012. Thus, the US price had climbed to $1.97 by February 2012. On 5 March 2012,

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DuPont posted a further $0.20 per pound increase, scheduled to take effect as from 1 April 2012. During the following week, the other four major multinationals – Cristal, Huntsman, Kronos and Tronox – all posted similar $0.20 per pound increases. But, this was the beginning of the end of the bull market in TiO2 pigment. The price increase actually achieved was $0.09 per pound, as distinct from the $0.20 per pound that had been sought. This took the average market price to $2.06 per pound, the highest level on the chart and 75% higher than the end-2009 level. In fact, the chart shows a 10-week plateau at $2.06, running from early April 2012 to the second half of August. But there were no more upward steps on the ICIS five-year chart. TiO2 pigment suppliers never announce price reductions, but they obviously happen anyway. The average realised price fell back to $2.01 per pound at the end of August 2012, then it fell to $1.95 in early October 2012, stayed at that level until early December and then crashed to $1.73 by the end of the year. There was another $0.10 per pound drop during the first two weeks of the New Year, but since midJanuary 2013 the US price has remained at about $1.625 per pound (equivalent to nearly $3600 per tonne). In fact, the range quoted by ICIS is $1.55-1.70 per pound and $1.625 is the mid-point of that range. As discussed in ‘Focus on Pigments’, May 2013, 2-3 & Jun 2013, 2, Kronos pioneered a move to halt the US price slide when it posted a $0.10 per pound price rise, scheduled to take effect on 1 March. The move was supported by Huntsman and Cristal, but DuPont and Tronox failed to endorse it. Reflecting the lack of support from the two leading suppliers to the US market, there was very little perceptible change in market prices. On 9 May, Kronos tried again, posting a $0.10 per pound rise, scheduled to take effect on 1 June. This time, DuPont and Tronox did respond. On 30 May, Tronox declared that it would raise its prices in North America by $0.06 per pound, effective 1 June. DuPont’s announced price rise was $0.08 per pound, scheduled to take effect as from 1 July. For DuPont, this was the first announced price rise since 5 March 2012 – almost 15

months earlier. Within a week of DuPont’s announcement, Huntsman and Cristal both followed suit, posting $0.08 per pound rises, due to take effect as from 1 July. However, most of the North American customers interviewed by ICIS believe that the latest announcements will make practically no difference to the market price. One respondent said: “The 3Q posted price increase is pretty much of a nonissue. Even though the TiO2 producers will tell you it isn’t.” Another respondent said: “There is simply not enough demand to tighten the supply/demand balance enough to support any price increases this year.” The high level of pigment producers’ finished product inventories has been a major factor encouraging customer scepticism about price increases. At the end of 2012, most of the multinationals were carrying pigment inventories equivalent to 100-120 days’ sales, whereas the normal level should be around 40 days’ sales. As a result of sharp curtailments in plant operating rates during the first half of 2013, the multinationals have been able to reduce their inventories, but they probably have not done enough in this regard. In mid-May, Mr Nick Fanandakis (Chief Financial Officer of DuPont) said: “Producers still have some excess inventory to work through, maybe about 10-15 days. That excess could be reduced by the end of June.” Mr Tom Casey (CEO of Tronox) said: “Once producer inventories return to normal, then utilisation rates could begin rising. They will need to rise before prices can recover.” Mr Peter Huntsman (CEO of Huntsman Corp) assessed overall industry levels of TiO2 pigment inventories at 100-120 days at the end of December 2012, at 75 days in mid-May 2013 and at 60 days by the end of July 2013. He said: “TiO2 is going to be a product that will come back as the US housing market comes back. I believe that we will see a real turn around by year end and throughout 2014.” Meanwhile, trends in other market regions have followed a similar pattern. ICIS charted TiO2 price histories for Northwestern Europe (on a free-delivery basis) in mid-June 2013 and for the Asia/Pacific region (on an inclusive cost-and-freight

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