A new Freedonia Group report stated that the worldwide market of dyes and organic pigments is expected to grow at an annual rate of six percent, reaching $19.5 billion by 2019, thanks to China and other Asian countries.
"While China will remain the dominant global consumer of dyes and organic pigments, rapid growth will also be experienced in smaller Asian markets such as Bangladesh, India, and Vietnam as textile and plastic producers continue to move production to countries with the lowest labor costs," Freedonia said in a press release. "Additionally, consumer preferences for new, unusual textile colors that do not fade and yet are environmentally friendly will boost growth in value demand as textile producers increasingly turn to these newer, higher value products."
Rising personal consumption expenditures will be the main driver of dye and pigment demand in the textile industry, which accounted for more than half of the world dye and organic pigment demand last year. Disperse and reactive dyes will also continue to represent nearly half of the total world dye demand, as they remain popular in manufacturing cotton and color polyester textiles.
There will also be continued demand for high performance pigments in plastic products, causing organic pigments to gain further market share. Consumption will remain concentrated in the Asia Pacific region, where majority of world textiles and consumer plastic products are manufactured. However, the fastest growth in the market will be driven by demand in paint and coating applications due to strong advances in construction in North America and continued growth in the Asia Pacific region.
But while the outlook for many applications remains healthy, only moderate advances are forecasted for demand in printing inks, as publishing of information in electronic form rapidly takes over print publishing. "Even faster advances will be limited by a moderation in worldwide motor vehicle production and slow growth in printing inks due to challenges facing the print media industry," the report said. Still, opportunities for the dyes and pigments industry would continue to exist in the form of digital inks.
Coupled with the rising demand in dyes and pigments is the ever increasing demand in titanium dioxide, which is the raw material used for the manufacture of these pigments. Paints and coatings is currently the largest application segment for titanium dioxide, and this is expected to continue in the coming years.
While the Asia Pacific market is anticipated to dominate the global titanium dioxide market, there are also other miners from outside the region that investors should watch out for, including Chile-based miner White Mountain Titanium Corporation (OTCQB: WMTM). The company operates the Cerro Blanco project in the Atacama region of Northern Chile, which is estimated to contain 112 million tons of rutile that will be primarily used in the paints and pigments industry.