“Technological shift towards powdered insulation coatings owing to stringent VOC regulations emerge as a key trend in the near future”
The global electrical insulation coatings market size was USD 2.0 billion in 2015. This rising electricity demand has resulted in upcoming projects focused on capacity expansions with increasing investment in power generation projects. The positive growth rate of the global transmission and distribution market is another factor which is anticipated to play a vital role in supporting the growth.
Unstable raw material cost, the high cost of formulations is expected to pose a major challenge to market participants. China is a major producer of resin as well as powder coatings. Slow economic growth, regulations related to volatile organic compounds and lack of governmental support are some of the key factors which have affected the supply of quality raw materials from China. These factors are likely to result in higher production cost of enamels.
The market is highly competitive with the presence of a large number of industry participants. Divestiture of the coatings businesses by key market players is a major trend witnessed throughout the industry. Uncertain economic conditions and stringent regulation related to volatile organic compounds emission are likely to pose a major challenge to the majority of industry participants.
U.S. electrical insulation coatings market volume by product, 2014-2024 (Kilo Tons)
“Powder based coatings are expected to witness brisk growth”
Electrical insulation coatings are largely available in the market in the liquid form. However, liquid based is anticipated to lose its market share to powdered based formulations over the forecast period owing to factors such as faster curing times, no requirement for solvents and their ability to emit zero volatile organic compounds.
Epoxies are used in powdered as well as resin forms. Epoxy powder coatings owing to their high dielectric properties help in negating high voltage spikes, especially when used in cable insulations. This product segment is anticipated to grow at an estimated CAGR of 4.0% from 2016 to 2024.
Raw Material Insights
“Epoxies are expected to emerge as the largest and the fastest segment by 2024”
Epoxies are known to have excellent dielectric properties, dimensional stability, good shock and vibration resistance. This raw material segment accounted for over 50% of demand in 2015. Favorable properties such as high thermal stability, mechanical strength, moisture resistivity, adhesion, electrical, mechanical and heat resistance make them suitable for various applications.
Polytetrafluoroethylene (PTFE) is another major raw material. China once again is a key player in the PTFE market. The government support for PTFE resin manufacturers has been declining. PTFE raw material segment is expected to grow at an estimated CAGR of 3.5% during the forecast period.
“Asia Pacific is expected to generate the largest demand during the forecast period”
Asia Pacific electrical insulation coatings market is expected to maintain its lead position over the forecast period. Growth in this region can be attributed to rapid urbanization, increasing investment in infrastructure development and robust economic growth of India and China. Easy availability of raw materials particularly in China is expected to foster the rising demand. Asia Pacific accounted for over 50% of the global demand in 2015.
Europe market is expected witness slow growth over the forecast period owing to strict regulations related to the emission of volatile organic compounds. The declining number of manufacturers, especially in France, is anticipated hamper the supply in the region. Europe is expected to grow at an estimated CAGR of 2.3% from 2016 to 2024.
“Divestiture of coatings business by major players is a key trend”
The global electrical insulation coatings market is highly competitive with the presence of large a number of industry participants. Divestiture of these businesses mainly to focus on their core competencies is a key trend followed by major corporations across the industry. One such example being DuPont selling its performance coatings business which was later rebranded as Axalta Coating Systems.
The threat of substitutes is expected to be moderate as few companies to gain a competitive edge have introduced insulation films. Limited application of these films is expected to hinder their market growth.
Companies such as Elantas GmbH, 3M Company, PPG Industries, AkzoNobel N.V., Evonik Industries have established themselves as key industry participants. Factors such as high integration throughout the value chain and global presence have helped these companies to expand their product portfolio thus giving them a competitive advantage over other players.
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