1-2010 Prepainted Coil Market
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Prepainted Coils are All 'Green'

New paint chemistries give prepainted metal additional energy-saving capabilities and provide great opportunity for the product to grow its share of the residential roofing market.

By Dan Markham,Senior Editor

Given the weak conditions in the construction sectors, both in the recent past and foreseeable future, the mood should be blue for distributors of prepainted coil. But in fact another hue—green—has brought shades of optimism to the prepaint supply chain.

The prepaint industry has long touted its material as the most environmentally friendly way to apply a coating to metal. With new technical developments in recent years, its reputation is being enhanced both ecologically and economically.

“I think the industry is reasonably healthy. A lot of that is because we’re working, as a group and individually, on our green efforts,” says John Mitchell, president of Lincolnshire, Ill.-based Nichols Aluminum and a past president of the National Coil Coating Association.

Coil coaters are already a pretty green group. They operate paint lines that apply coatings to high volumes of steel and aluminum sheet at very high speeds. The sheet first passes through a paint bath, then through a series of ovens that capture all the potentially harmful air emissions as the coating cures. Then the material is recoiled and packaged for shipment, all in one continuous process. Compared to post-painting of formed parts, coil coating is much quicker and more efficient, and produces far less waste.

Recent innovations in paint chemistries have made coil coatings even more environmentally friendly. Several years ago, chemical company BASF led the paint industry in the development of new pigments with additional heat-reflective properties. These new coatings are particularly beneficial for metal roofing applications.

“They reflect off a significant amount of the heat that comes from the sun,” explains William Hippard, president of the Metal Roofing Alliance, a Belfair, Wash., trade association.
“You can save anywhere from 25 to 45 percent off your air conditioning bills in the summertime, because that’s how significant it is to lower the amount of heat that comes into your attic.”

The reflective properties of the new paints, which all of the major paint companies can supply, aren’t limited to lighter colors. Cool metal roofs reflect sunlight even in the darker shades. And the benefits are not lost during the colder months. An air pocket forms between the decking and the metal that acts as an insulator to keep heat in during the winter, Hippard says.

For the metals industry, the biggest opportunity to cash in on this development resides with the residential construction market. Metal roofing has been widely used in nonresidential construction, where builders of commercial and office space had already accepted the life-cycle cost advantages of the product even before cool coatings were introduced. But converting homebuilders and homeowners to the benefits of metal roofing—buyers for whom short-term costs and aesthetics play a bigger role in purchasing decisions—has been a tougher sell. But progress has been made on both those fronts. The opportunities available for prepainted metal roofs go well beyond a simple array of colors.

“One of the things that has helped is that a lot of our manufacturing members have some really beautiful products. If you like Cedar Shakes, you can get a metal roof that looks like Cedar Shakes. If you like clay tile, you can get one that looks that way, or one that looks like asphalt shingles,” says Hippard.

Historically, converting residential buyers has been hampered by the upfront costs of metal roofs, which are about 40-60 percent higher than traditional roofing materials. But some of those short-term cost hurdles have been mitigated by recent decisions out of Washington.

As part of its overall effort to encourage energy savings nationwide, the federal government introduced a $1,500 tax rebate to homeowners who put a cool metal roof on their residences. Industry experts believe the 2009 tax credit will be extended into the future.

Tax credits for energy efficient roofing have helped metal roofing suppliers gain volume and market share in both residential and commercial markets, adds Mitchell. “We’ve got a lot of savings we can provide folks by putting metal on a roof.”

Prepainted coil suppliers have made substantial gains in the residential construction sector in recent years. A decade ago, only 3 to 4 percent of U.S. homes were covered by a metal roof. Today, the figure is close to 11 percent, with the possibility for greater inroads.

“We’ve had 7 to 8 percent growth in the last 10 years. That’s 700,000 tons of metal that needed to be painted,” says Hippard, who also serves as vice president of sales for coil coater Precoat Metals in St. Louis.

Reflective pigmentation is only one way that coated coil suppliers can sell the product’s green attributes to environmentally conscious end-users, says Don Switzer, prepaint product manager at Steel Dynamics in Fort Wayne, Ind. Metal roofs also are a good place for installing solar panels and photonic cells. And of course, the product is made in large part from recycled metal and is completely recyclable if it is later replaced.

In terms of production, the process of prepainting coil is typically better from an environmental standpoint than post-painting. The EPA has identified coil coating as one of the industries that must adhere to its Maximum Achievable Control Technology standards. In simple terms, the MACT standards require 98 percent of the industry to be as good as the industry’s best. The end result of such a burden is an industry that is state-of-the-art in terms of its capture and destruction of hazardous air pollutants.

“We’ve all complied, at significant expense,” Mitchell says. “We’ve had challenges on almost every front, but as a group we’ve come up with a number of ways to meet those challenges.”

Such regulatory restrictions present a significant barrier to entry for potential new coil coaters. Petersen Aluminum Corp., Elk Grove Village, Ill., for example, is one of the nation’s larger distributors of painted metal building products, but it has no plans to add a paint line to coat its own coils. “I’ve never been inclined to bring on a coating facility, primarily because of the EPA issues that come with it,” President Mike Petersen says.

Environmental issues that come with post-painting—capturing the harmful air emissions from sprayed solvents and disposing of the solid waste from overspray—offer some leverage when it comes to converting post-paint operations to prepainted material, says NCCA President Jim Dockey. “Anything that’s post-painted—formed and sprayed or powder coated after it’s been manufactured—provides an opportunity for growth of the prepainted coil market.”

“Coil coating takes a lot of the environmental issues that come along with painting and encapsulates them in a facility where it can be controlled,” Hippard adds.
Beyond the residential construction sector, which includes roofing, metal wall panels and windows, industry leaders see the HVAC and office furniture markets as the most promising applications for prepainted metal.

Despite its promise, the prepaint market was hard hit by the economy in 2009. Industry executives estimate their business was off anywhere from 25 to 40 percent last year. They forecast that any recovery in 2010 will be modest and likely won’t happen until the second half of the year.

“We’ve survived the worst of it, but that’s a pretty dramatic reduction in the market when you look at shipments of prepaint. Now we’ve got to adapt to the new market that’s out there,” says Dockey, who works as the director of sales and marketing for CENTRIA in Moon Township, Pa.

As a result of the recession, several suppliers idled paint lines in 2009. These idlings reflect the dramatic turnaround in market conditions from just a few years ago when Precoat Metals, Steel Dynamics and Indianapolis-based Roll Coater commissioned several new, state-of-the-art coil coating lines.

“There was new capacity brought on-stream over the last four or five years, then the market shrank 30-35 percent, creating an imbalance in supply and demand. As a result, there have been some coating lines indefinitely idled or shut down for good. That’s been the biggest fallout. The question is whether there will be more reduction on the supply side of things,” Dockey says.

SDI has no immediate plans to add a third line to the existing paint operations at its Butler and Jeffersonville, Ind., mills, but says future expansion of prepaint production is likely. 

“We paint the steel here, so there’s no scrap. And we control the substrate. The quality of the product going to the paint line is very consistent,” Switzer says. “I’m sure down the road we’ll produce more. It’s a market we’re going to continue to focus on.”

  
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Thursday, July 31, 2014