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The price of printing: first paper, now ink

Thursday, 07 December 2017
By Print21

Leading ink manufacturers Flint Group and Sun Chemical say the rising cost of raw materials has forced a new round of global price hikes.

‘Cost pressure has been utterly relentless’: Doug Aldred, Flint Group.

“It has become clear that the raw material markets for many components within Flint Group’s Packaging Inks products have experienced price escalation. Many raw material markets remain highly volatile as 2017 comes to a close,” says Doug Aldred, president packaging inks for Flint Group.

“Despite our tenacious efforts to mitigate these dynamics by deploying significant capital to efficiency projects, cost pressure has been utterly relentless. The situation now necessitates that we pass some increases through the supply chain.”

Flint Group Packaging Inks will raise prices globally as of 1 January 2018. Our sales representatives are currently in the market discussing the magnitude of increases for each customer and segment, said the company in a statement.

Unequivocal price inflation has been witnessed in polyethylene and polyethylene resins, titanium dioxide, pigments, key solvents, glycerin and MMAs; all these feedstocks affect the cost base of both solvent-based and water-based inks and coatings. To highlight a few specific examples:

Numerous pigment production facilities in China have been ordered to close, awaiting environmental inspection; Glycerin prices in 2018 are expected to be 80-90% higher than 2017; Key solvents are under pressure due to outages and tight material supply; Persistent tightening of and price escalation in the Titanium Dioxide (TiO2) market.

Sun Chemical, part of DIC Group, will also increase its prices on liquid inks and coatings for flexible packaging from January 1, 2018. The percentage increase will be in the high single digits and will vary dependent on the product composition and product line.

‘Raw material costs are unprecedented’: Felipe Mellado, Sun Chemical.

The levels of raw material costs are unprecedented and as a result make it necessary for us to keep our ink prices under review,” says Felipe Mellado, chief marketing officer, Sun Chemical. “We work proactively with our supply chain partners to manage and minimize costs, but due to the economic reality, cost pressures have been constant and significant price increases are being passed on to the inks industry. To ensure we maintain high levels of product quality and service, it has become necessary to increase customer prices.”

Since the end of 2016, costs have risen on an annual basis and further increases are expected for 2018, said the company in a statement.

These are mainly due to production and environmental restrictions on key materials, especially in China where there has been an unprecedented number of force majeure incidents and escalations in the prices of oil, solvents and key monomers for polyurethane (PU) resins. Additionally, the supply situation of titanium dioxide (TiO2) white pigment remains tight, driving continued cost increases.

Headquartered in Luxembourg, Flint Group employs 7900 people globally and has offices in Australia and New Zealand. Revenues for 2016 were € 2.3 billion.

Sun Chemical, together with parent DIC group, has annual sales of more than $US7.5 billion, with over 20,000 employees located at 176 subsidiaries across 63 countries, including in Australia and New Zealand.

The latest price rises follow a similar round of ink price hikes earlier this year.

Australian leading paper merchants have also announced price increases that will take effect in the new year.

 

 

 

 

 

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