Amid rising raw material prices and fuel costs due to the Middle East war, major paint makers raised coating prices one after another in the first half of this year.
According to semiannual reports disclosed by each company on the 21st, the average coating prices of SP Samhwa and Noroo Paint(090350) in the first half rose by as much as 17% from a year earlier, depending on the product group.
The average price of architectural coatings for SP Samhwa and its subsidiaries was 4,104 won per liter (ℓ) in the first half, up 8.7% from 3,776 won a year earlier. Over the same period, industrial coatings rose 9.7%, and other coatings rose 15.5%.
Noroo Paint's average price for architectural coatings was 3,307 won per kg, up 17.2% from 2,822 won in the first half of last year. Industrial coatings and PCM steel sheet coatings also rose 6.9% and 1.3%, respectively. In contrast, automotive refinish coatings fell 4.9%.
Each company said higher materials and supplies prices due to the war in the Middle East and fluctuations in oil prices and exchange rates affected product prices. With the Strait of Hormuz blocked, the supply of naphtha, a basic petrochemical feedstock, became unstable and prices jumped, and prices of polyol, a waterproof paint raw material produced by processing naphtha, also rose.
Among SP Samhwa's major materials and supplies, pigment prices rose 12.9% per kg from a year earlier. Solvents rose 26%, additives rose 3.2%, resins rose 12.4%, and packaging containers rose 0.8%.
At Noroo Paint, the average price per kg of resin rose 8.8% over the same period. Prices of pigments, solvents, and additives also rose 12.2%, 24%, and 16.5%, respectively.
In the report, SP Samhwa said, "In the first half, materials and supplies prices generally trended higher due to geopolitical uncertainties in the Middle East stemming from the United States-Iran war, rising international oil prices, and global logistics disruptions," adding, "Solvents continued to see sharp unit price increases due to supply shortages, and polyol posted a steep price rise as a seller's market formed amid instability in basic raw material supply chains and supply controls."
Noroo Paint also noted, "Rising military tensions between the United States and Iran pushed up international oil prices in a short period, triggering higher prices for major petrochemical feedstocks including naphtha, and the resulting rapid increase in raw material prices acted to expand cost burdens across the petrochemical industry," adding, "Crude oil and naphtha prices reacted sensitively to geopolitical issues, showing repeated short-term price volatility."
However, both companies reduced the actual price hikes from earlier plans in consideration of partner burdens. SP Samhwa in April adjusted the maximum increase rate for key products from 20% to around 10%. Noroo Paint also scaled back the increase and excluded water-based product lines that had been slated for price hikes.