The Electrical Insulation Coatings Market is forecast to reach US$2.9 billion by 2027, after growing at a CAGR of 3.5% during the forecast period 2022-2027. The types of coating that are primarily used for electrical insulation include polytetrafluoroethylene, epoxy, acrylic, ceramics, acetate, polyolefin, polystyrene, and other materials. It is used in a wide range of industries such as Electrical & Electronics, Automotive, Aerospace, Military & Defense, Solar, IT & Telecommunication, and other end-use industries. In 2019, the Middle East Solar Industry Association (MESIA) announced that at least US$ 15 billion of solar power projects is expected to operate in the region in the next five years. The increasing demand for electrical insulation coatings from the solar and automotive industries act as the major driver for the market. On the other hand, fluctuating prices of raw materials may act as a major constraint for the market.
COVID-19 Impact
There is no doubt that the COVID-19 lockdown has significantly reduced construction, and production activities which in turn, has resulted in the country-wise shutdown of sites, shortage of labor, and the decline of supply and demand chain all over the world, thus, affecting the market. Studies show that the outbreak of COVID-19 sharply declined the production of raw materials in 2020 due to a lack of operations across multiple countries around the world. However, a slow recovery in the electronic industry has been witnessed across many countries around the world since 2021. An increase in work from home and e-learning practices during COVID-19 has significantly led to high demand for laptops, tablets, and smartphones which have resulted in the higher production of these electronics. For instance, according to the Retailers Association of India (RAI), consumer electronics net sales increased by 2 % in September and 8% in October 2020, in comparison to 2019, owing to the increase for electronic devices for remote practices during COVID-19.
In this way, a slow and steady increase in electronics production activities will require the use of Electrical Insulation Coatings like polytetrafluoroethylene, epoxy, acrylic, ceramic, acetate, polyolefin, and polystyrene for the insulation of electric wires, batteries, and other electrical components in these gadgets. This will eventually lead to an increase in demand for electrical insulation coatings which indicates a slow and steady recovery of the market in the upcoming years.
Electrical Insulation Coatings Market Segment Analysis – By Material Type
The Epoxy material type held the largest share in the Electrical Insulation Coatings Market in 2021 and is expected to grow at a CAGR of 3.7% in the forecast period 2022-2027, owing to the increasing demand for epoxy material due to the characteristics and benefits it offers over other types of materials. For instance, it has a wide range of characteristics, easy processing, corrosion resistance and they are less affected by heat, water, and other factors as compared to PTFE (polytetrafluoroethylene), ceramics, polystyrene, polyurethane, and other electrical insulation materials. Moreover, epoxy resins are easier to process, have high strength, high mechanical properties, low reduction during cure, good adhesion to all types of fibers, along with excellent thermal resistance and electrical insulation, which makes it ideal for use in electrical insulation coatings in comparison to other materials. Hence, all of these factors are most likely to boost market growth in the upcoming years.
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Electrical Insulation Coatings Market Segment Analysis – By Product Type
The liquid coatings held a significant share in the Electrical Insulation Coatings Market in 2021, owing to its increasing demand due to the properties and advantages they offer. Liquid coatings are beneficial and hold an advantage in humid environments compared to powder coatings that are less effective in humid environments. The liquid coatings provide excellent adhesion properties, good resistance to heat and abrasion, require very little time to dry, and can be applied to a wide range of surfaces and substrates as opposed to powder coatings. Furthermore, liquid coatings are also available in low VOC (Volatile Organic Compound) products, offer a wide range of color variations, and are more economical and cost-effective in comparison to powder coatings. All of these factors will eventually increase the demand for liquid coatings for electrical insulation, thus, boosting the market growth.
Electrical Insulation Coatings Market Segment Analysis – By End-Use Industry
The Electrical & Electronics held the largest share in the Electrical Insulation Coatings Market in 2021 and is expected to grow at a CAGR of 3.9% in the forecast period 2022-2027, owing to the increasing demand from electrical components used in electrical transmission and distribution projects across the globe. For instance, according to NES Fircroft, the U.S has invested around US$ 3 billion for its electrical transmission and distribution project called the Euro-Asia Connector worth US$ 4.1 billion in 2022. The project requires electrical insulation coatings for the insulation of electric wires, cables, and other electronic components used in the project. The project aims at building a cross-border electricity grid that will be connected through bi-directional cables in order to provide a steady and sufficient supply of electricity through national transmission operators. Similarly, it further states the commencement of another electrical distribution project called the Euro-Africa Connector worth US$ 4 billion. The project is expected to begin in 2022 and aims at connecting Egypt, Cyprus, and Greece through a 2,000MW electricity interconnector by the end of 2022. This, in turn, will increase the demand for electrical insulation coatings required for the insulation of electrical wires, cables, batteries, substrates, transformers, along with other electrical components. This will most likely lead to the growth of the market in the upcoming years.
Electrical Insulation Coatings Market Segment Analysis – By Geography
The Asia Pacific held the largest share in the Electrical Insulation Coatings Market in 2021 up to 30%. The consumption of electrical insulation coatings is particularly high in this region due to the increasing demand for electrical insulation coatings from the electrical & electronics, and automotive sectors. Electrical insulation coatings play a vital role in these sectors since they are primarily used in electrical wires, cables, batteries, substrates, and other electronic components along with automobile batteries, switches, and other electrical components of the automobile in order to prevent electrical leakage, short circuits and for providing good protection of electrical components against moisture, corrosion, and abrasion. For instance, recent insights from NES Fircroft states that the State Grid Corporation of China (SGCC) has started a new power transmission and distribution project worth US$ 33.7 billion in 2020 in order to meet the increasing electricity demands in China. The project aims at building 12 electricity transmission lines capable of connecting the coal production and hydropower centers to the densely populated parts of the country.
According to a recent study published in the Economic Times (Telecom) in 2021, electronic manufacturing and production are valued at around US$ 100 billion in India currently. It further states that mobile manufacturing in India is estimated to surpass INR 90000 crore (US$ 12 trillion) by the end of 2021 as per the statement made by the Indian IT Minister. Likewise, according to the annual reports published by Samsung during the fourth quarter of 2020, the total revenue of the consumer electronics division was valued at KRW 13.6 trillion (US$ 11.3 billion) with an operating profit of KRW 0.8 trillion ($ 668 million).
A recent study published by the International Netherlands Group (ING) states that the demand for the production and development of Electric Vehicles has been increasing since the pandemic. It states that the global sales of new Electric Vehicles have increased by 50% in 2021, and are expected to increase by 8% in 2022. It further states that the sales of Electric Vehicles have increased by 14% in Europe, 9% in China, and 4% in the US.
Hence, an increase in demand for electricity, electronics devices, and automotive will require the use of electrical insulation coatings in electrical wires, cables, batteries, substrates along with automotive batteries, switches, and other electrical components of the automotive. All of these factors are most likely to lead to the growth of the Electrical Insulation Coatings Market.
Electrical Insulation Coatings Market Drivers
An increase in demand from the solar industry is most likely to increase demand for the product
The demand for electrical insulation coatings has been increasing rapidly as it is primarily used for insulation of solar wires and solar panels used during solar PV installations. According to the Global Outlook for Solar Power Industry published by the Global Solar Council, a total of 138.2 GW solar PV capacity was installed across the world during 2020, which indicated an increase of 18% in comparison to 117.6 GW solar in the year 2019. China was the leading country with 48.2 GW of solar PV capacity installed in 2020. This is followed by the US with 19.3 GW, Vietnam with 11.6 GW, Japan with 8.2 GW, and Australia with 5.1 GW of total solar PV capacity installed by 2020. All of the top five leading countries saw an increase in their annual growth rate in comparison to 2019.
In this way, an increase in demand for the use and installation of solar PV capacity will also increase the demand for electrical insulation coatings required for insulation of solar wires and solar panels, thus, leading to market growth in the forecast period.
An increase in demand from the automotive industry is most likely to increase demand for the product
According to a recent study published by the German Association of Automotive Industry during the fourth quarter of 2020, the new registration of motor vehicles reached up to 16,763 units in Europe, 37,467 units in Asia, 3080 units in South America, 17,421 units in North America, 12,733 units in Western Europe, and 5180 units in other regions worldwide. Likewise, a recent study published by the International Netherlands Group (ING) states that the demand for the production and development of Electric Vehicles has been increasing since the pandemic. It states that the global sales of new Electric Vehicles have increased by 50% in 2021, and are expected to increase by 8% in 2022. It further states that the sales of Electric Vehicles have increased by 14% in Europe, 9% in China, and 4% in the US.
Hence, an increase in demand and production of vehicles will also increase the demand for electrical insulation coatings required for the insulation of automotive batteries and other electrical components of the vehicle in order to prevent electrical leakage, short circuits and for providing good protection of electrical components against moisture, corrosion, and abrasion. This is most likely to drive the growth of the market in the upcoming years.
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Electrical Insulation Coatings Market Challenges
Fluctuating prices of raw materials can cause an obstruction to the market growth
Shortage and lack of availability of key raw materials along with a significant increase in prices are causing disruption to the coatings industries in the UK, Europe, and other regions across the world. For instance, BCF’s monthly raw material prices survey shows a sharp increase in prices for epoxy during the first quarter of 2021, an increase of 60% in comparison to the third quarter of 2020. Other raw materials prices are also expected to increase by 2022. Moreover, processing PTFE (polytetrafluoroethylene) can be quite difficult and expensive, due to its high melting temperature, and viscosity. Hence, fluctuating prices of such raw materials may confine the market growth.
Electrical Insulation Coatings Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Electrical Insulation Coatings Market. Electrical Insulation Coatings Market top companies are:
3M Company
PPG Industries
AkzoNobel
DuPont
Evonik Industries
Axalta Coating Systems
Elantas
Sherwin-Williams
Aremco Products
Chemetall Group
Fluoro Precision Coatings
Recent Developments
In September 2021, SolEpoxy, a manufacturer of insulating coating powders, launched a new busbar coating powder for insulation of conductors in Electric Vehicles and its battery packs. This new insulation coating powder is tough, cost-effective, easy to use, and has high resistance to temperature.
Key Takeaways
The Electrical & Electronics industry in Electrical Insulation Coatings Market is expected to see the fastest growth, especially during the forecast period, owing to its increasing demand for insulation of electrical and electronic components from the industry.
Epoxy material in Electrical Insulation Coatings Market is expected to see the fastest growth, especially during the forecast period, owing to its increasing demand and benefits over other types of electrical insulation coatings such as PTFE (polytetrafluoroethylene), ceramics, polystyrene, polyurethane, and other materials.
Asia-Pacific dominated the Electrical Insulation Coatings Market in 2021, owing to the increasing demand for electrical insulation from the electrical & electronics, and automotive sectors from the region.
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