Valspar Celebrates
50 Years of Fluropon
PVDF Resin-based
Coatings
The Valspar Corporation celebrates
50 years of Fluropon 70 percent PVDF
resin-based coatings. Since the flagship
architectural coating launched in 1965,
Valspar’s Fluropon exterior coatings have
become the industry standard for both
metal coil coating and aluminum extru-
sion applications.
To commemorate its golden anniversary, Fluropon50.com will provide
information on Fluropon products and
Results of U.S. Architectural Coatings Industry Research Report Which Compared Business Trends
in 1Q15 vs. 1Q14
Each month, North Coast Research surveys
a large sample of paint retailers throughout
the U.S. to get a sense for current business
trends. Please note that of the three primary
architectural coatings channels (paint stores,
home centers, and retail distributors), this
survey is primarily reflective of the distributor
channel which tends to see volume growth
less than the industry; therefore, we view the
results as a directional indicator more so than
absolute industry volumes. For inquiries
regarding this report please contact Kevin
Hocevar at 216-468-6924 or kevin.hocevar@
northcoastresearch.com.
Architectural Coatings Sales — Volumes Up 1.1% in 1Q15 vs. 1Q14
According to industry participants, average sales volumes increased 1.1% in
1Q15 compared to 1Q14. This compares
to volume growth of 1.6% in 4Q14, 1.2%
in 3Q14, and record volume growth of
2.6% in 2Q14. Although still positive, we
note that volumes grew at the slowest
rate in 1Q15 since the inception of our
survey, indicating slight slowdowns during the period primarily due to weather.
We continue to expect the full-year 2015
to play out similar to our initial expectations, although we now expect some
1Q15 demand to be deferred into later
periods. Overall, 51% of respondents
witnessed an increase in paint volumes
vs. only 20% that saw volumes decline,
averaging out to 1.1% year-over-year volume growth with a net increase of 31%.
Price of Paint from Suppliers — 1Q15
Paint Prices Trend Slightly Higher
51% of contacts noted an uptick in the
price of paint in 1Q15 vs. 1Q14 as our
paint price index rose 1.1% compared to
average increases of 0.5%-1.0% in 2014.
Our research suggests that a little bit of
price is sticking in the U.S. architectural
paint industry but only in the independent
dealer channel and likely in the low-single
digit range. We do not believe the paint
store or home center channels are seeing
price increases at this time. Recall that we
picked up potential price increases in the
results from our 4Q14 survey where we
observed a meaningful uptick in contacts
that have been notified of a price increase
from paint manufacturers to take place in
2015. The majority of contacts believed
these attempts would be successful and
we believe that data we have discovered
in 1Q15 suggests that some degree of
pricing did in fact stick in the marketplace.
Overall, 51% of respondents witnessed
an uptick in pricing vs. only 6% that saw
pricing decline, averaging out to a 1.1%
increase in year-over-year pricing with a
net increase of 45%.
Raw Materials — Continued Raw Material Declines Suggest Increasingly Encouraging Price/Raws
Based on our research, we believe oil-
based raw materials and titanium dioxide
(TiO2) have seen meaningful declines
thus far through 1Q15. To simplify, we be-
lieve the raw material basket for coatings
can be broken down into 30% oil derived
raws, 20% TiO2, and 50% other. Certain
oil-based raws, such as solvents are down
at least 25%-30% whereas other polymer-
based raws are down at least 5%-10%.
TiO2 started to see declines in 4Q14 af-
ter several quarters of remaining flat and
our research suggests pricing has slipped
further in 2015 to the tune of another 8%-
10%. Assuming the “other” category will
see flat to slightly higher pricing, we be-
lieve raw materials will decline mid-single
digits in 2015 which is more pronounced
when compared to our initial though
which forecasted low-single digit declines.
3-Month Outlook — Outlook at Strong
Levels as Contacts Expect Pent-Up Demand and Busy Paint Season
Our proprietary Coatings 3-Month Outlook Index reached 0.80 in 4Q14 which
compares to a reading of 0.36 vs. 4Q1and
a reading of 0.92 vs. 1Q14. Please note
that the highest possible reading is +2
(indicating all contacts have a “very positive” outlook) and the lowest possible
reading is -2 (indicating all contacts have
a “very negative” outlook). We were not
surprised to see a strong outlook level in
our 1Q15 survey and view the 0.80 reading as in-line with our initial expectations;
however, we believe outlooks are strong
as the majority of contacts anticipate an
acceleration in demand and are excited
for what appears to be a busy 2015.
