This article is an independent observation and judgment by Holy Hong based on public market information and does not constitute investment or business advice.

I. Trigger Mechanism: Geopolitics → Energy Costs → Closed-Loop Transmission to Chemical Feedstocks

The immediate trigger for this round of price increases is not a shortage of a single raw material, but rather the classic transmission chain: geopolitical conflict → rising international oil prices → widespread increases in the costs of basic chemical feedstocks.

Since mid-March, the escalation of the situation in the Middle East has driven up crude oil prices, which in turn has pushed up the prices of basic petrochemicals such as aromatics and olefins. Consequently, the costs of intermediates—such as resins, solvents, and additives—on which the coatings industry relies have also risen. Unlike previous episodes of sharp price spikes in a single feedstock, this round is characterized by synchronized increases across the entire value chain and across multiple product categories, leaving companies unable to absorb the higher costs through formula adjustments or raw-material substitution.

Key Judgment This is not a cyclical price surge driven by supply-demand mismatches; rather, it is the result of a geopolitical risk premium being passed on to end-users in the manufacturing sector. The degree of sensitivity that coatings companies exhibit to macroeconomic variables has become a key metric for assessing supply-chain resilience.

II. Transmission Channels: Leading Firms Initiate Price Adjustments, with SMEs Following Passively

Judging by the pace of price adjustments, this round is characterized by strengthened pricing power among leading firms and diverging compliance attitudes among small and medium-sized enterprises.

• Leading companies (price adjustment range of 5%–15%) Represented by foreign-invested giants and leading domestic paint companies, price adjustment notices were predominantly issued from mid- to late-March. The rationale behind these adjustments is clear: using profit margins as the anchor while proactively reducing exposure to risk.
• Small and medium-sized enterprises : Companies generally face a dilemma—raising prices may result in customer loss, while holding them steady could exacerbate losses. Based on market feedback, most small and medium-sized enterprises follow the price adjustments of leading firms within a week, but typically by a smaller margin, highlighting their weaker pricing power.

Key Judgment This round of price increases has further widened the gap in pricing power between leading firms and small- and medium-sized enterprises. In a mature, stock-based market environment, the “price anchor” effect of leading firms is strengthening, thereby compressing the bargaining space for SMEs.

III. Impact by Segment: Industrial Coatings and Powder Coatings Face Different Pressure Paths

Industrial Paint: Greatest Resistance to Cost Pass-Through

In the cost structure of industrial coatings, resins and solvents are the two most critical raw materials, accounting for a disproportionately large share across the industry. In the current round of price increases, both of these key inputs have risen in tandem, sharply escalating cost pressures on manufacturers. Given that downstream customers—such as those in construction machinery, steel structures, and automotive components—generally wield strong bargaining power and operate under long-term procurement contracts, price pass-through is significantly more difficult compared with other market segments, placing industrial-coatings firms under even greater margin compression.

Powder Coatings: Concentrated Raw Material Structure, Leading the Price Increase

The core raw materials for powder coatings are polyester resins and epoxy resins, which are closely linked to crude oil prices at the upstream end. Around March 20, powder-coating companies collectively issued price-adjustment notices, making this segment the fastest to respond in the current round of price hikes. Compared with industrial paints, powder coatings serve a more diversified customer base and benefit from more mature pricing mechanisms, resulting in relatively smooth price pass-through.

Key Judgment : Differences in cost structures and downstream bargaining power across various market segments result in markedly divergent price-pass-through efficiency. The pressures currently facing industrial coatings companies may be greater than what the financial statements suggest.

IV. Structural Impacts: Accelerated Elimination of Low-End Capacity and Potential Increase in Industry Concentration

From the perspective of industrial evolution, the current round of cost pressures may give rise to the following structural impacts:

Accelerated elimination of low-end capacity
In the low-end industrial coatings and general-purpose powder coatings segments, where profit margins are already slim, rising costs will directly squeeze cash flow. Companies lacking technological barriers and weak customer loyalty will face an existential challenge.

Premium pricing power for high-value-added products is becoming increasingly evident.
Niche segments with strong technological barriers—such as heavy-duty anti-corrosion coatings, high-temperature-resistant coatings, and functional powder coatings—demonstrate greater pricing power in passing on cost increases. In the anti-corrosion sector, some companies have seized this opportunity to simultaneously upgrade their product mix, re-linking price hikes with “technology premiums.” As a result, firms’ incentive to shift toward higher-value-added products has been further strengthened.

Industry concentration is expected to increase.
Cost volatility cycles typically present a window of opportunity for industry consolidation. Companies with strong financial resources and robust supply-chain management capabilities are well positioned to expand their market share during periods of stress.

Key Judgment Cost pressures serve as both a stress test and a watershed moment. Following this round of price hikes, the industry landscape is likely to accelerate its bifurcation into two distinct poles: “leader consolidation” and “specialization in niche segments.”

V. Forecasting and Recommendations: Shifting from Reactive Response to Proactive Management

In the short term, if geopolitical tensions do not ease and crude oil prices remain high, raw material costs in the chemical industry will continue to be rigid, leaving paint manufacturers with little prospect of a rapid relief from cost pressures.

For enterprises, the central question at this stage is no longer “whether to raise prices,” but rather:

① Pricing strategies should be tiered.

Price adjustments should be differentiated across product lines and customer tiers, rather than applied uniformly. Maintaining price stability for strategic customers while aligning adjustments with standard-product customers is a strategy widely adopted by leading companies today.

② Establishing an early warning mechanism for the supply chain

Establish a monitoring ledger for price fluctuations in key raw materials, set procurement trigger thresholds, and build up moderate inventory at lower price levels—these may seem like small measures, but they can deliver significant cost-smoothing benefits during periods of cost volatility.

③ Accelerate product structure upgrading

Turn cost pressures into a window of opportunity for product upgrades: proactively phase out low-margin standard products, concentrate resources on high-value-added categories, and ensure that price increases are well-founded and sustainably supported.

In this round of cost-pressure testing, the resilience of different firms has already diverged markedly.

Focusing on the niche segment of industrial coatings Holy Hong For example, it does so by Secure key raw materials in advance, optimize the product mix, and control the proportion of standard products. Despite the widespread rise in raw material prices, a series of integrated strategies have enabled the company to maintain a relatively stable delivery schedule and pricing policy.

The very existence of such enterprises serves to confirm a trend:

The core of industry competition is shifting from “who can produce” to “who can operate sustainably.”

Conclusion

The price hike wave in March 2026 may appear cost-driven on the surface, but at its core it represents a collective test of the industry’s ability to withstand pressure. Against the backdrop of macroeconomic variables increasingly becoming the new normal for the sector, the competitive edge of paint and coatings companies is shifting from a focus on “production and manufacturing” to a three-dimensional capability that encompasses “supply-chain management, pricing power, and product mix.”

It is never the largest in scale that can weather economic cycles—it is always the most resilient.

— Industrial Coatings Industry Watch | Author’s independent judgment, for reference only