By Gu Chaoying

   The global market for color masterbatch is expected to grow at a CGAR of 6.6% to US$1.581 billion in 2025. The trend of plastic components replacing steel will promote the growth. Color masterbatch still accounts for the largest part of total revenue in 2017~2018, and demand will continue to grow at 6.8%~7.0%. In the automotive, construction and consumer goods sectors, the need to improve the appearance of plastic parts is also expected to drive demand growth.
   A few leading enterprises in China have the ability to compete with international enterprises in product research and development, technology, equipment level, management level, product quality and other aspects, and have gained customer recognition in the high-end product market. Some of these enterprises have been exporting color masterbatch to many countries and regions. In 2018, large and medium-sized enterprises are still the mainstay of development in the Chinese color masterbatch industry. These enterprises are headquartered mainly in Guangdong, Jiangsu, Zhejiang, Shanghai and Shandong.
   There are hundreds of color masterbatch enterprises in China, but only a few dozen produce more than 10 kt annually. Moreover, output of high-end products has not been significantly improved.

   The big backdrop of the global economic downturn has reduced demand for midrange and low-end color masterbatch in pipes, films and building materials obviously. The color masterbatch industry has difficulty progressing with heavy overcapacity and undifferentiated products. In recent years, the Chinese firms that mainly produce midrange and low-end color masterbatch have slowed production, even by more than 50%.
   At the same time, some functional color masterbatch is difficult to find in the domestic market. Chinese functional color masterbatch with flame resistance, electrical conductivity, UV stability and so on still cannot meet the actual needs of high-end customers. By 2020~2025, the production of colored silk yarn in the chemical fiber industry will increase from 3 million tons to 8.6 - 11 million tons, greatly increasing the demand for highly functional color masterbatch, bringing great development opportunities to the industry. At present, cleaning up production has become the primary challenge for the survival of medium and small color masterbatch enterprises. The emergence of a large number of “green” environment-friendly high-quality plastic and chemical-fiber products at lower prices also poses new issues for innovation in the color masterbatch industry.

   In recent years, Guangdong Malion New Materials Co., Ltd. has been listed in the A share market, and Changzhou Hongmei and other enterprises are listed in the new third board market, indicating that color masterbatch players are gradually growing larger. But, compared with other fine chemicals sectors, color masterbatch enterprises are still smaller in scale. Over the past three years, China has faced great environmental pressure, and many small and medium sized color masterbatch enterprises face this challenge with difficulty, even stopping production. Larger enterprises with R&D capabilities are expanding production capacity and increasing their functional color masterbatch catalog. Smaller color masterbatch manufacturers may face a big shuffle soon.
   The development of cleaner production technology is focused on R&D of new technology and new formulas. The power of single-enterprise R&D is falling far short of meeting the requirements. But collaborative innovation is also occurring at the national level – development and application of high quality liquid color for raw fiber is included in the 13th five-year national key R&D plan, and liquor dyeing technology for raw chemical fibers is now valued and supported at the national level. Much progress has been made in R&D for color masterbatch for chemical fibers by both color masterbatch firms and chemical fiber enterprises.
   In addition, dispersion performance has been greatly improved in color masterbatch with no-spray metallic effect. At the same time, computer color matching technology is a new trend in the application of color masterbatch and is driving the industry towards intelligent technology.