A trend of price hikes is spreading across Korea's paint and coating industry. Some companies recently carried out double-digit increases. With the Korea Fair Trade Commission launching a probe into possible collusion, tension in the market is rising.
According to the industry on the 2nd, Chokwang Paint and Kangnam Jevisco sent official notices to clients in late March announcing price increases on all products. Chokwang Paint raised prices immediately upon notice, while Kangnam Jevisco increased powder products by more than 10% and key products by up to more than 15%.
Earlier, Samhwa Paint Industrial, Noroo Paint, and KCC also notified suppliers last month of higher supply prices. Most of the hikes were double digit, and Noroo Paint raised prices on some thinner products by 40% to 55%.
The backdrop is a surge in materials and supplies expense. The coatings industry relies heavily on petrochemical-based inputs such as naphtha, solvents, and resins, making it sensitive to international oil prices and exchange rates. Heightened tensions in the Middle East amid U.S.-Iran friction have increased oil price volatility, and the won-dollar rate has climbed to 1,500 won, pushing up manufacturing costs.
KCC, which had flagged a price increase, fully withdrew the plan on the 1st of this month. The company said the decision was aimed at easing potential consumer burdens from paint price hikes amid broad inflationary pressures.
A KCC official said, "We withdrew the plan to help reduce consumer burdens in line with the government's price stability stance." The official added, "Although our current price structure makes each sale generate losses, we will seek ways to minimize them," and "We plan to operate our pricing policy prudently while closely monitoring conditions."
As major companies raised product prices citing higher materials and supplies expense, suspicions of collusion also surfaced. The Korea Fair Trade Commission conducted on-site inspections last month at the headquarters of five companies and the Korea Paint & Printing Ink Industry Cooperative. The industry maintains that the moves were unavoidable due to cost pressures, but the Korea Fair Trade Commission (FTC) was said to have launched the probe to determine whether there was any prior agreement on price hikes.