Raw Material Shortage Challenging Coatings Industry

The persistent and industry-wide raw material availability constraints and pricing inflation have worsened and are not expected to improve this year, creating challenges for the coatings industry. Many of the raw materials are made in China, which is not exporting at capacity because its own industries need the supply. Most coatings have been affected and the shortage has led to price increases as much as 300 per cent which are filtering right down to the customer. The supply chain is further complicated by a shortage of container vessels, which has increased the cost of shipping dramatically. As well, labour shortages are impacting logistics companies that are struggling to find drivers. Sherwin-Williams has narrowed its third quarter sales expectations as a result of these challenges. John G. Morikis, president and chief executive officer, says, “Our suppliers are now reporting that the impacts of Hurricane Ida are more severe and will be longer lasting than initially thought. Production of several key resins, additives, and solvents, expected to resume by late September, has been pushed out .... In addition to the significant supply challenges, raw material pricing remains highly elevated, and we are increasing our full-year raw material inflation outlook to be up a high-teens percentage compared to last year.”