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Due To The Rising Cost Of Raw Materials And Freight, The Global Ink Giants Set Off A New Round Of Price Increases!

Author: Site Editor     Publish Time: 04-24-2022      Origin: Site

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It is well known that the printing ink industry is generally reluctant to raise prices unless under pressure, as their printing customers are also known for their meager margins. However, recent and ongoing news indicates that price increases are coming. It should be noted that not every ink company announces the timing of price increases, but typically, higher costs for raw materials and/or shipping affect each company. Reports from Sun Chemical, Flint Group, Centurion, the National Association of Printing Ink Manufacturers (NAPIM) and the European Printing Ink Association (EuPIA) all highlight the current challenges facing the ink industry.

Insights from EuPIA and NAPIM01

It is not unusual to see ink companies provide statements about price pressures. the action taken by EuPIA in mid-February provides a comprehensive analysis. euPIA notes that "the increased cost of pigment raw materials due to reduced container volumes, the tightening of the upstream petrochemical supply chain, the increased cost of vegetable oil derivatives, and the significant increase in freight costs are among the many destabilizing factors highlights." One area of concern: TiO2. euPIA reported extended lead times due to supply shortages. petrochemicals is another challenge. Price increases have pushed up the cost of raw materials and resins, while also affecting the cost of color pigments.

EuPIA also provides some other interesting details. For example, vegetable oils and their derivatives face higher costs, which can affect alkyd resins and esters.EuPIA writes, "Beginning in the fourth quarter of 2020 and continuing through 2021, vegetable oil prices have rebounded spectacularly, reaching their highest levels in six years, driven by a number of developments that have come together. "

"Palm oil production is at a three-year low while worldwide palm oil stocks are at low levels; the soybean oil complex has gone from surplus to deficit, unfavorable weather conditions in the U.S., drought in Latin America has disrupted its production and supply, and Chinese imports and consumption have grown much more than expected. All of these factors have affected the cost of vegetable oils and their derivatives, such as alkyd resins and esters, which are the primary materials used in paste inks for package printing and publication printing."

The problem of containers being stranded in ports after shipping schedules were disrupted by the outbreak was also a major factor, EuPIA noted: containers were being sent around the world and stranded in ports. The inequality between customer demand and supply shortages has led to a severe shortage of global freight capacity. In the long run, container prices between Central Europe have increased by more than 400% since Q4 2020."

NAPIM discusses its own concerns about the challenges facing the ink industry, and NAPIM Executive Director John Copeland writes, "The printing ink industry in North America is facing unprecedented challenges in terms of raw material feed inventories, supply and freight. Virtually all raw materials for the printing ink industry, including oils, energy curing agents, solvents and aqueous systems, have been significantly impacted."

Ink Company Cost Report02

As noted above, not every ink company announces higher costs, but when Sun Chemical, Flint Group and Centurion all take note of them, it means that the situation facing the entire ink industry is the same today.

Effective March 15, 2021, Sun Chemical is raising prices in North America for a range of products, including sheetfed inks, coatings and adhesives for packaging and commercial printing. The leading global ink manufacturer cited shortages in the supply of petrochemicals, vegetable oils and their derivatives, increased international freight costs and increased demand from various sources as the reasons.

These unprecedented circumstances have led to significant inflationary pressures that have forced us to raise prices," said Chris Parry, president of Sun Chemical North America Inks, in announcing the ink price increases. to offset these costs. We remain committed to providing best-in-class solutions to our customers."

In addition, Sun Chemical Latin America announced a 10 percent price increase for sheet-fed products and a 5 percent price increase for energy curable products. "Due to recent market dynamics, we have been forced to increase prices to offset increases in raw materials and shipping volumes," said Fernando Tavala, president of Sun Chemical Latin America, who announced the price increases.

Beginning April 1, 2021, Flint Group Packaging plans to increase prices for inks and coatings. The company noted higher costs and tightening supply in many areas, including pigments, resins, solvents and freight. Announcing the price increases for inks and coatings, Doug Aldred, president of Flint Group Packaging's Ink Division, said, "The unusual set of supply chain conditions is the most dire I've ever seen. Our business is facing significant cost and availability hurdles across multiple raw material categories. Resins, solvents and pigments (including titanium dioxide) are particularly problematic."

"Regrettably, despite our relentless efforts to offset costs and risks for our valued customers, the pronounced and prolonged pressures experienced in certain categories since mid-2020 have forced us to act." Emanuel Barlow, president of Flint Group's Narrow Web Division, added that certain raw materials, such as UV resins, additives and pigments, have reached cost peaks not seen in the past decade or more.

While the reasons for the price increases were not mentioned by Centurion, the packaging ink specialist pointed to many of the same root causes as Sun Chemical, including higher pigment and petrochemical prices, petrochemical supply issues, and higher freight costs. By 2021, we are already seeing the combined impact of multiple factors closely related to the outbreak severely impacting the entire raw material supply chain," said Dr. Arash Babai, Global Sourcing Director at Centurion. Our team is working hand-in-hand with our global supply chain to leverage its buying power and minimize risk to our customers."

Specifically pointing to TiO2, carbon black, metals and color pigments, Dr. Babai said that Centurion has received price increase notices from several suppliers. On the petrochemicals side, prices for key ingredients including UV, acrylic and polyurethane resins and solvents are increasing. Freight is another factor, as in addition to transportation costs, Centurion noted a shortage of freight containers. Dr. Babai concluded, "Despite the changing general situation, Centwick is doing everything in its power to ensure an uninterrupted supply of products for our customers."

Supplier issue price increases03

On the ink raw material supply side, there are a number of announcements that will also affect the ink industry. Major resin producer Infinity announced that it will increase the price of all commodity and derivatized tall oil rosin and tall oil fatty acid products from 10 to 15 percent effective April 1, 2021. These are key raw materials for certain ink resins. In this case, Infotech cited customer demand and higher raw material costs.

In specialty pigments, Eckart announced its first price increase starting on March 1, 2021. The producer of metallic and special effects pigments noted that it had absorbed the previous price increases through efficiency gains and reported that recent above-average increases in chemical, transportation and packaging costs had forced it to raise its pigment prices.

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