Metal finishing is the process of placing the metal coating on the surface of a metallic part, referred to as a substrate. It can also involve the implementation of a process for cleaning and polishing. Metal finishing chemicals are used to treat the surface of metal products by forming a thin coating to enhance the appearance, function, or performance of the product, and increase marketability. Electrolytic plating, electroless plating, and chemical and electrochemical conversion processes are widely used processes for metal finishing.

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Demand Outlook

The global metal finishing market was estimated at ~USD 95 billion in 2020 and it is expected to grow at a CAGR of 4% from 2020 to 2027 due to increasing demand from end-use industries, such as automotive, aerospace, construction, and electrical and electronics. Automotive and electronics applications accounted for more than 60% share in the global metal finishing Industry. Moreover, increasing expenditure in aerospace R&D by various governments including the U.S., Germany, France, the U.K., Poland, and Sweden is expected to fuel the demand for metal finishing during the forecast period. APAC is expected to witness a CAGR of ~6% over the next five years, owing to growing automotive and construction spending coupled with rising disposable income in the region.

Cost Drivers

The cost of metal finishing depends on the process. In most metal finishing processes metal finishing chemicals are used. The cost of metal finishing chemicals is the major cost driver of metal finishing services. It accounted for more than 50% of the overall cost of metal finishing. Other key components include processing costs, machinery costs, utility costs, labor costs, etc. Metal finishing suppliers majorly outsource the operations to APAC due to the high availability of raw materials and low-cost labor. It also reduces the transportation and logistics cost of metal finishing and increases profitability.

Constraints

The Covid-19 pandemic affected the metal finishing Industry negatively. As many governments were forced to temporarily halt large-scale industrial operations, the demand for metal finishing dropped significantly. Metal finishing chemical suppliers have extended lead times ~2 weeks due to the effects of COVID on the workforce. This disruption has led to price rises in the metal finishing and coating industry. For instance, the costs of key components of coating systems, such as epoxies, have increased by 60% in Europe. Furthermore, around 20 chemical companies like BASF, DuPont, Dow, DSM and have raised prices due to difficulty in procuring raw materials used to make such materials as resins and epoxies.

Supply Chain

A.E. Aubin Company, Almco, Grind Master, Guyson Corporation, Honeywell International Inc., Linde plc, Luster-On Products, Inc., Mass Finishing Incorporated, OC Oerlikon Management AG, Okuno-Auromex, OTEC Precision Finish, Inc., Plating Equipment Ltd, POSCO, are some of the key metal finishing service providers. The global metal finishing industry feature a highly fragmented landscape as the industry leaders contribute less than 20% of the overall market share. Leading suppliers are strengthening their presence through multiple mergers and acquisitions. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.

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About us:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of the supply chain which helps in efficient procurement decisions.

Our services include (not limited to):

·        Market Intelligence involving - market size and forecast, growth factors, and driving trends

·        Price and Cost Intelligence - pricing models adopted for the category, the total cost of ownership

·        Supplier Intelligence - rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

·        Sourcing / Procurement Intelligence - best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best-suited countries for sourcing to minimize supply chain disruption

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