The metal finishing category is anticipated to grow at a CAGR of 4.7% from 2023 to 2030. The process of applying a metal coating to the metallic component’s surface, usually known as a substrate, is referred to as metal finishing. A few major types of metal finishing are abrasive blasting, powder coating, electroplating, passivation, electropolishing, buff polishing, hot blackening, etc. Electroplating, or the process of placing metal ions on a substrate using an electric current, is an integral aspect of metal finishing. Two popular bulk electroplating techniques are barrel plating and rack plating. By end-user industry, automotive and electronics industry applications account for more than 50% - 60% of the total share.
As a trend, metal elements are becoming increasingly popular as a finishing touch for surfaces, especially in commercial settings such as bar tops, washroom vanities, tabletops, etc. In terms of finish, silver and brass are the most popular choices among consumers. Another key trend is the rising advancements in the medical diagnostics sector. In particular, spectrometry-based diagnostic technology is driving the demand for noble metal surfaces such as palladium, gold, and platinum. Following the pandemic, there has been a high demand for plating solutions that can produce high quality or purity surfaces. In the medical industry, the standards for these surfaces' quality are getting stricter. One instance is the use of platinum in medical instruments that are required for blood analysis.
The metal finishing industry is being driven by the increasing need to streamline operations, advancements in additive manufacturing and 3D printing, and the high demand for EVs. Similar to the rest of the manufacturing industry, finishers and coaters are seeking ways to streamline their operations. To overcome obstacles such as labor shortages, quality control, and repeatability, finishers are increasingly finding ways to employ robotics and industry 4.0 solutions. Finishing operations have traditionally been slow to adopt IoT and automation solutions, but in recent times, the finishing industry has been ramping up. On the other hand, with the advent of EVs, many electrical components and battery parts will require finishes as automotive OEMs invest heavily to enhance their EV capability offerings. In addition to exterior finishes, EVs also require specialized coatings for corrosion protection and thermal management. This will further boost category demand.
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The metal finishing category is highly fragmented and unorganized. The industry is mostly dominated by numerous small regional/local players spread throughout the country. Hence the bargaining power of suppliers is moderate to low owing to low switching costs for buyers. Heavy metals, cyanide, and volatile organic compounds are among the hazardous air pollutants that can be released during electroplating processes. Hence, metal finishing companies are increasing their investments in upgrading their technology or processes that can reduce the environmental impact as part of their ESG efforts. In many cases, the vendors are using a lot of recycled metal content in their designs. In an effort to widen the customer base, many suppliers, especially in the electroplating industry, are concentrating on offering a combination of metal finishing and other technical premium services.
The major cost components in this category include metal finishing chemicals, processes, machinery and technology, labor, electricity, facilities and utilities, and others. Other costs can include marketing, tax, administrative expenses, insurance, etc. In a custom metal finishing project, labor accounts for the majority of the project's cost. In general, standard post-production procedures include passivation, painting, powder coating, sanding, cleaning, etc. In the powder coating process, depending on the use case, powder materials can include nylons, polyesters, epoxies, or any other chemistries. Similarly, for corrosion protection, plating metals can include zinc, chromium, nickel, aluminum, etc. In the electroplating sector, nickel continues to remain as the most sought-after metal owing to its properties of wear and corrosion resistance, luster, and brightness.
At the end of September 2023, global nickel prices reached USD 19,500 per ton. The prices have fallen months after fluctuating between USD 20,000 and 22,000 per ton in 2023. According to the Crux Investors 2023 report, this drop is a short-term blip as nickel has continued to show bullish momentum due to accelerating demand from EVs. The nickel demand from the EV segment continues to observe a 50% - 60% growth annually. As a result of the Indonesian export ban and other policies of resource nationalism, nickel supply uncertainty from major producing areas like Indonesia and the Philippines has increased. This in turn tightens nickel availability outside of China. Hence nickel prices are expected to strengthen till 2024 - 2025.
Metal finishing processes are usually outsourced by many large companies. End-user companies such as automotive OEMs or electronic companies prefer to adopt a hybrid outsourcing model. By outsourcing, end-user companies focus on developing new products or expanding their product lines which has the potential to drive more revenue. From an outsourcing benefit viewpoint, finishing companies have specialized equipment in addition to other engineering or chemical services, which will produce better results in a cost-effective way. Selecting a supplier that has the proper finishing chemicals and can provide high-purity surface finishes according to industry (client’s focus) specifications and requirements, evaluating vendors based on equipment, automation tools, and technology, and checking the quality of the end product are some of the sourcing strategies considered in this category. Suppliers' adherence to standards such as OSHA, US EPA, metal finishing effluent guidelines like 40 CFR Part 433, REACH compliance, etc. are also carefully considered.
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Metal Finishing Procurement Intelligence Report Scope
• Metal Finishing Category Growth Rate: CAGR of 4.7% from 2023 to 2030
• Pricing Growth Outlook: 5% - 9% (Annually)
• Pricing Models: Contract-based and cost-plus model
• Supplier Selection Scope: Cost and pricing, past engagements, productivity, geographical presence
• Supplier Selection Criteria: By application area (marine, industrial and general, automotive OEM), by type of finish (electroplating, zinc plating, anodising), automation tools, operational and functional capabilities, technology used, and others
• Report Coverage: Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model
Key Companies
• OC Oerlikon Management AG
• Honeywell International Inc.
• Atotech
• Elementis PLC
• Delstar Metal Finishing Inc.
• Metal Finishing Technologies, LLC
• Industrial Metal Finishing
• The Diamond Metal Finishing Co Ltd.
• Karas Plating Limited
Brief about Pipeline by Grand View Research:
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 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, total cost of ownerships
• 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 disruptions