Middle East conflict, ships blocked in the Strait of Hormuz, over 20 major coating companies officially announce price hikes

Every Day Reporter | Huang Hai Every Day Editor | Cheng Peng Yang Jun

Reporter | Huang Hai

Editor | Cheng Peng Yang Jun Du Hengfeng Proofreader | Chen Kemin

The oil crisis caused by the Middle East war continues to impact global industry ecosystems.

Because crude oil accounts for over 40% of coating costs, paint prices are highly correlated with oil prices. Rising oil prices have driven rapid increases in prices of petroleum-derived solvents, resins, additives, and other materials. According to CCTV Finance, taking epoxy resin, a main raw material for coatings, as an example, its price has risen from 14 yuan per kilogram to 20 yuan, a significant increase of 43%. Many companies have had to reduce raw material procurement and inventory to control costs.

In response to rising raw material prices, more than 20 key domestic paint companies have issued price adjustment notices, covering all categories including architectural coatings, industrial anti-corrosion coatings, waterproof coatings, and more. Specifically, since March, several leading paint companies such as Oriental Yuhong and Sankeshu have successively announced price adjustments.

On March 25, multiple related listed companies confirmed to the “Daily Economic News” reporter that the current trend of price increases is ongoing. Industry insiders said that future adjustments will depend on raw material costs and competitors’ pricing strategies.

Several paint companies announce price hikes

The oil and gas transportation situation through the Strait of Hormuz has significantly affected Asian markets, with the ripple effects intensifying as the strait remains closed longer.

A research report from Guojin Securities on March 24 stated that the closure of the Strait of Hormuz has been extended, and many indirect effects are further amplifying. Downstream refining and chemical production are beginning to adjust operations due to unstable upstream supply and ongoing inventory consumption, leading to partial product supply contraction or strategic production cuts. Globally, petrochemical products priced uniformly are seeing raw material prices rise sharply, initially benefiting inventory gains but now entering a stage of cost transmission pressure in many downstream processing segments.

It is understood that the main costs of coatings include film-forming substances (such as resins, emulsions, asphalt, etc.), pigments, solvents, and additives. The recent price increases caused by oil prices have almost covered all key raw materials: BA (butyl acrylate), 2-EHA (2-ethylhexyl acrylate), MDI (diphenylmethane diisocyanate), TDI (toluene diisocyanate), neo-pentanol, epoxy resin, and others, all experiencing sharp price hikes.

According to a research report from China Post Securities, as of March 20, TDI raw material prices increased by about 24% in a week and by 52% over the month. CCTV Finance also reported that epoxy resin, a main raw material for coatings, rose from 14 yuan per kilogram to 20 yuan.

Returning to the coating market, some companies had already issued price increase notices in early March to pass material costs downstream. For example, on March 1 and 2, news reported that two listed companies in waterproofing and coatings, Oriental Yuhong and Keshun Co., issued price adjustment notices. A Keshun staff member confirmed the authenticity of the notices to the “Daily Economic News.”

The price adjustment notice from Keshun Co. showed that, due to the continuous rise in crude oil prices and market supply and demand changes, the prices of main raw materials for waterproofing materials, such as asphalt, had increased rapidly, with a cumulative rise of over 10%. Starting March 15, the prices of asphalt-based membranes and asphalt coatings will be increased by 5% to 10%.

As raw material prices continued to rise in mid to late March, more coating companies announced price adjustments, with some forced to keep raising their product prices.

On March 20, Shanghai Sankeshu Waterproof Technology Co., Ltd. disclosed a price adjustment notice stating that since the beginning of the year, prices of major raw materials like asphalt have continued to surge. Based on current trends, crude oil and related raw material prices are expected to keep climbing. Although the company had already increased prices by about 5% to 15% on March 15, the current raw material price increases far exceed the company’s existing pricing capacity. To ensure product quality and stable service, and to maintain long-term cooperation, after careful evaluation, the company decided to further adjust the prices of engineering waterproofing products: starting April 1, 2026, prices will be increased by an additional 5% to 12% on top of current prices.

Additionally, according to industry-specific media and CCTV Finance reports, more than 20 coating companies have announced price hikes since March.

Coating industry shows signs of divergence

Although the industry-wide price increase trend has begun, the reporter notes that some companies’ prices remain stable, showing a divergence overall.

CCTV Finance also pointed out that downstream acceptance of price increases varies significantly: sectors like home decoration and automotive tolerate higher prices, while traditional industrial sectors are more sensitive. Industry insiders say that in the short term, the core factor influencing coating prices remains oil prices. As cost pressures persist, future coating prices are likely to rise more easily than fall.

On March 25, the reporter interviewed several listed coating companies. An executive from a company specializing in automotive coatings told the “Daily Economic News” that upstream raw material prices have indeed increased, but the company currently has some inventory and has not raised product prices.

Another listed company executive in automotive coatings said that since their raw material inventory generally lasts one to two months, short-term raw material price changes won’t significantly impact downstream product prices. Even if they adjust prices, they will consider competitors’ actions. “Our company has accumulated experience over the years, and our funds are relatively sufficient. Whether to raise prices depends on whether we want profit or market share. Every company has its own strategy.”

“The upstream suppliers have indeed been notifying us of price increases, mostly verbally, without specific figures. Overall, prices are still manageable,” the executive added.

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| Daily Economic News nbdnews Original Article |

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