Eric Casebolt, Director of Business Development, ChemQuest Powder Coating Research, discusses what is driving the high growth of powder coatings in the US
Powder coatings were first developed in a German laboratory in the 1950s and have since become an important coating technology, comprising an estimated 20% of the global industrial OEM coating market value. The driver behind the impressive growth of powder coatings can be attributed to their environmentally friendly profile, combined with exceptional performance characteristics.
Looking forward, powder coatings are projected for continued above-market growth, with most reports claiming a global CAGR of 5.2-6.2% through 2028 (and the US market to be on the higher end of the growth range). What is driving this high CAGR in the US? Some growth will come from areas where the US lags behind other regions, while emerging technologies will drive other growth opportunities.
Sustainability in building and construction
Powder coatings are often used over aluminium extrusions for interior and exterior building and construction applications, such as metal facades and curtain walls. In the world of powder coatings, this is referred to as the architectural market segment. These coatings must meet specifications written by third-party organisations such as the American Architectural Manufacturers Association (AAMA) in the US and Qualicoat or GSB in Europe. Both powder and liquid coatings are used in this market, and they must adhere to the same performance requirements to be considered for projects.
While market information for powder coatings is notoriously difficult to obtain, it is generally understood that market penetration for powder coatings in architectural applications in Western Europe is 2-3 times higher than that of North America. There are a few reasons for this, but education of stakeholders (architects, building owners, etc.) is at the forefront of the discrepancy.
For example, if you ask an architect in Western Europe how they decide between a powder or liquid coating for an architectural application, they will often tell you, “If powder can be used, then it will be used and there is no real choice to make.” The answer isn’t so straightforward in the US. Here, you might be told, “That’s up to the applicator and what equipment they have.” Or you may be asked, “Do powder coatings last as long as liquid coatings?”
In addition to a growing understanding in the US regarding powder coating capabilities and benefits, it is expected that an increasing focus on company environmental, social, and governance (ESG) ratings, embodied carbon in buildings, and Leadership in Energy and Environmental Design (LEED) certification will accelerate the use of powder coatings in architectural applications. Powder coatings offer the ability to eliminate the use of volatile organic compounds (VOCs) with no loss of performance in a one-coat system, providing an obvious advantage over many liquid coatings for these applications.
The electric vehicle boom
The growth of electric vehicles (EVs) is expected to remain well into double digits for the foreseeable future. In fact, Goldman Sachs forecasts sales of EVs to grow by 32% annually over the next decade.1
This growth offers new opportunities in several spaces, including EV batteries. With a unique set of coating requirements, batteries in electric vehicles are mainly assembled in battery packs comprising several lithium-ion battery cells and other modules grouped together.
To avoid the potential for electrical failure via arcing, these components must be electrically insulated from one another and from other parts of the vehicle. To avoid fire and/or premature battery degradation, these components also need a way to dissipate the heat that is created during charging or use and to insulate them from external temperature extremes. For optimal battery efficiency, the temperatures within the battery pack must remain relatively constant. The coating used on these parts is an integral part of the battery thermal management system (BTMS). Finally, the coating must have excellent corrosion and chemical resistance to withstand the harsh conditions that it will be exposed to during everyday vehicle use.
To summarise in technical terms, coatings for EV batteries must have high dielectric strength, excellent corrosion and chemical resistance, facilitate thermal dissipation, and insulate the battery from extreme external temperatures. This combination of properties matches the profile of what powder coatings can offer, and several large powder coating manufacturers have launched products and continue to innovate in this space.
Keen readers may be aware that the manufacture of many EV battery components is dominated by China, so how will the rise of EVs affect the growth of powder coatings in the US? Well, the strategists at Goldman Sachs expect the US’s Inflation Reduction Act (IRA) to disrupt the supply chain for EV battery components: “Under this framework, companies will not be able to use the battery supply chain that has been built up in China to export to the US. Our strategists see strong signs that the IRA official announcement in March 2023 will give a relative advantage to manufacturers that are pushing ahead with local production in the US of EVs, battery-related products and EV components.”1
In other words, as EV demand increases in the US, the manufacture of domestic battery components is expected to keep pace. Powder coating producers capable of supplying products to meet the evolving challenges of the market will be ideally placed to capitalise on this growth.
Expansion into heat-sensitive substrates
No powder coating growth story is complete without a discussion of heat-sensitive substrates. As previously discussed, powder coating technology accounts for an estimated 20% of the global industrial OEM coating market. However, that share would be significantly larger if the same properties could be achieved at curing temperatures low enough for heat-sensitive substrates.
Low-temperature and UV-cure powder coatings for heat-sensitive substrates are not new concepts. This has been an area of active research for decades, and products have been commercialised that can cure at temperatures low enough for many types of wood and plastics. So why aren’t these powder coatings used at a larger scale for those applications?
The real issue is that curing at low temperature is not enough, and innovation is required on various fronts to tackle this challenge. Achieving the application properties, aesthetics and performance of standard cure systems requires a holistic approach involving powder coating developers, equipment manufacturers and applicators working together to develop large-scale commercially viable solutions.
Expanding the opportunities for powder coatings
Many companies (in the US and beyond) simply don’t have the resources to invest in the R&D needed to explore new powder coating technologies and applications. In numerous cases, it makes sense to partner with a third party to help align organisations to achieve the broader objective.
At ChemQuest, we have been and are actively involved in these types of collaborative conversations and projects. We see a promising future for powder coatings, as the industry works toward commercially viable solutions that will unlock a huge amount of growth potential for powder coating technology.