The Global Pre-Painted Metal Market is expected to grow at a high CAGR of 10.8% during the forecasting period (2022-2029).
Pre-painted metal is made by applying paint or film coating to strip metals, primarily steel and aluminum, continuously. This process is called coil coating. The coating material forms a film having protective, decorative, and specific properties. The coated surface is available in a different range of colors, gloss levels, and surface textures.
The global pre-painted metal market is driven by factors like rising demand for pre-painted metal in domains such as construction, automobile, consumer electronics.
Rising Demand in various domains
The high usage of pre-painted metal for constructing the roof, doors, and walls of residential and commercial buildings is driving the market growth. Its availability in various colors offers modern designs. It is used for the manufacturing of garage doors, metal roofs, panels, furniture. Other uses include home appliances like refrigerators, dishwashers, chimneys, ovens, washing machines. Commercial appliances like vending machines, food service equipment also come in its application. The uses are increasing exponentially with the advent of technology. High durability and recyclability make pre-painted metal suitable for office furniture such as desks, cubicle divider panels, file cabinets, and other furniture and home appliances such as refrigerators and dishwashers, freezers, range hoods, microwave ovens, and washers, and other appliances.
Government support and investments in the market
The government is raising funding and investments for promoting infrastructure development in various developed and developing countries. Rising government investment shall have a positive impact on the market over the forecasted period. For instance, the US government planned to invest USD 4.5 trillion in infrastructure development in the forecast period in Latin America.
According to the FDI INDIA website, the construction sector is the second-largest recipient of FDI in INDA. By 2025, the Construction market in the country. is expected to emerge as the 3rd largest globally and the construction output is expected to grow on an average of 7.1% each year.
Foreign Direct Investment (FDI) received in the construction development sector was USD 25.12 Billion in 2019. It is expected to increase over the forecasted period due to different initiatives such as Housing for All and Smart City Mission adopted by the government.
In the 2021 annual budget, the Indian government announces that the allocation of 1.88 billion dollars in the Smart Cities Mission which aims to provide their citizens with core infrastructure, decent quality of life, and a clean and sustainable environment.
Moreover, the growing government initiatives for removing tariffs for steel and aluminum imports, especially in developed countries, fuel the market growth.
Relaxation of import duties on metals cuts the cost of production of pre-painted metal. For instance, the Indian government announced in its annual budget of 2021 that it would revoke anti-dumping duties on imports of alloy steel bars, rods, and flat steel products coated or plated with aluminum or zinc until Sept. 30. This step will allow small and mid-sized manufacturing companies to stay in the market.
For instance, in May 2019, the United States government had agreed with Canadian and Mexican governments to remove the Section 232 tariffs for steel and aluminum imports from those countries and remove all retaliatory tariffs imposed on American goods countries.
COVID-19 Impact Analysis
The pre-painted Metal market depends highly on the iron and steel industry as steel has the highest market share among all the product segments. It had taken a hit during the pandemic. The supply and demand chain has been affected due to lockdown in many countries producing steel. According to World Steel Association, global crude steel output decreased by 0.9% in 2020.
According to WTO (World Trade Organisation), in 2021, world trade in iron and steel was down 17% in the third quarter of 2020, but this decline was reduced to 2% by the fourth quarter. Iron and steel trade indicates broader economic conditions as these products are heavily used in both automobile manufacturing and building construction, both of which have applications of pre-painted metal.
The global pre-painted metal market is segmented based on products as steel and aluminum. The steel segment accounts for the high market size owing to the high use of steel for pre-painted metals as it possesses the properties such as greater resistance towards drying out, warping, and cracking. Pre-painted steel is widely used in various applications such as metal roofing, garage doors, lighting fixtures, home appliances, heating, and air-conditioning.
The World Steel Association in April 2021, released its Short-Range Outlook (SRO) for 2021 and 2022. It forecasts that steel demand will grow by 5.8% in 2021 to reach 1,874.0 million tonnes (Mt), after declining by 0.2% in 2020. In 2022 steel demand will see further growth of 2.7% to reach 1,924.6 Mt.
In April 2021, ISA(Indian Steel Association) announced that the re-entry of four steel players in the Indian steel market. They are Tata Steel Ltd., Tata Steel BSL Ltd (formerly known as Bhushan Steel), Tata Steel Long Products were from the Tata Group, and Bhushan Power & Steel Ltd which was recently taken over by JSW Steel Ltd. The re-entry strengthens the vision of taking forward the Indian steel industry as a global leader acclaimed for its quality, productivity, and competitiveness. This in turn will help to contribute towards the government’s objective of an ‘Atmanirbhar Bharat’ and will help to recover the steel industry from the pandemic.
The aluminum segment is expected to have positive market growth due to its lightweight and high strength due to the rising demand. Pre-painted aluminum is widely used for building facade cladding in ventilated and non-ventilated construction. Pre-painted aluminum is costly in comparison to raw aluminum.
By region, the global pre-painted metal market is segmented into North America, South America, Europe, Asia-Pacific, Middle-East, and Africa. Europe dominates the market due to the high production of aluminium. More than 120 production lines are situated within European Union countries producing more than 1,200 million m² of pre-painted metal per year. According to the European Steel Association, the steel industry in Europe has around 500 production sites spread across 22 European Union countries.
There is high growth in the automotive industry. According to the European Automobile Manufacturers Association,2020 press release there are 298 automobile assembly and engine production plants in Europe. 142 factories in Europe produce passenger cars, 38 make light commercial vehicles, 58 build heavy-duty vehicles, 58 produce buses, and 71 make engines. Approximately 19.2 million cars, vans, trucks, and buses are manufactured every year.
The recovering construction industry shall increase the demand for pre-painted metals. According to Euroconstruct, recovery of the European construction industry is swifter than initially expected, with much of the losses from the Corona pandemic expected to be recovered in 2021. Its latest estimates indicate that construction volume in Europe will grow by 3.8% in 2021, following a slump of 5.1% in 2020.
The global pre-painted metal market is consolidated with the presence of several local and international players. ArcelorMittal, Tata BlueScope Steel, SSAB, Nippon Steel Corporation, Voestalpine AG, SSAB AB, and Novelis are the leading market players with significant market share. The product diversification and new product launches intensify the market competition among the companies
Companies are using product diversification, product innovation, capacity expansions, and market expansion strategies for holding their position in the market.
In 2021, ArcelorMittal launched XCarb, carbon-neutral steel that brings together the companies’ reduced, low, and zero-carbon products and steelmaking activities. The product would be a progressive step towards carbon-neutral steel, the demand of which is expected to rise in the forecast period due to pollution issues.
The companies enter into collaborations, mergers, strategic partnerships, and acquisitions to increase the demand for pre-painted metal and their expansion across the globe.
For instance, in April 2021, Volvo Group and SSAB signed a collaboration agreement on research, development, serial production, and commercialization of the world’s first vehicles to be made of fossil-free steel. This was a step towards Volvo’s objective of becoming a climate-neutral company following the Paris agreement.
In April 2021, AcrelorMittal and Infosys announced strategic collaborations to digitally transform and enable next-generation application management and business process management (BPM) services for ArcelorMittal Europe. This step will reduce the cost of production and thus will contribute to market growth
In another instance, in May 2018, Vorteq Coil Finishers, LLC had acquired Wheeling Services & Supply, Inc. According to the transaction, the Wheeling operation would be renamed Vorteq Woodstock, LLC. This acquisition would help the company increase its production capacity and service its residential building products, customers, and the Midwest.
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