Raw Material Shortage Impacts Ink Prices
The National Association of Printing Ink Manufacturers (NAPIM) recently issued a bulletin, providing insight into the current volatility in the raw material supply chain. The bulletin, sent to NAPIM’s members, reviewed the availability of critical raw materials likely used in the inks that printers purchase in all of the major printing processes—lithographic, gravure, flexographic and inkjet.
Availability, driven by capacity and demand from competing regions and industries, remains the determinant on how much product any one manufacturer can obtain and at what cost. Some of the key raw materials causing price increases include: rosin, acrylic acid, carbon black, titanium dioxide, nitrocellulose, crude oil and natural gas, vegetable oils and colored organic pigments.
Rosin is a major ingredient in resin production. Gum rosin has experienced a nearly threefold increase in price during 2010 and supply remains constrained with very low inventories. The resins produced from rosin are not only used in offset, flexographic and rotogravure printing inks but are also used in adhesives, road markings and rubber.
Numerous production problems around the world and increased demand from other industrial applications have created a taut market that has experienced sales control initiatives from major producers. The cost pressure and supply constraints are expected to continue through 2011. These dynamics cause significant and on-going challenges in the water-based and UV markets.
Reduction in available capacity has been seen and lead times have increased significantly. Automotive demand is increasing as well as the demand in several other markets. Two major carbon black suppliers are for sale.
Titanium Dioxide (TiO2)
Suppliers are not taking on new business as supply remains tight and inventory levels are very low. Global capacity, during the economic downturn, was reduced by 15 percent over the past 18 months and there is no indication that investment will be made to accommodate future growth in the industry.