Pigment Manufacturers Face Continued Uncertainty

By David Savastano, Ink World Editor | 10.14.09

During the past few years, the printing ink industry has been struggling, caught between the slumping economy and increasing prices for raw materials. In addition, the unstable world political situation is also causing tremendous uncertainty.

Perhaps the only saving grace has been the costs of pigments, the most expensive component of ink, which has remained fairly stable.

The fact that pigment prices have remained steady has not been entirely good news, though. Certainly, it has been detrimental for the pigment companies themselves. The influx of pigments from Asian nations has forced prices down, and is forcing domestic producers to work on lower margins. There has also been reduced demand for pigments as the printing industry, the customers of the ink industry, has been flat at best.

The low cost of pigments, coupled with tighter margins, is having a negative impact on research and development for many manufacturers. In addition, some pigment companies are understandably moving away from the more competitive pigments and are focusing on more profitable areas.

At the same time, ink companies are emphasizing quality and consistency in their own products, and are relying on pigment manufacturers to meet ever more stringent specifications. This requires that pigment companies improve their own processes. As margins get tighter, some pigment companies are finding that this is proving to be more difficult.

However, there are signs that the price of some imported pigments and its raw materials are increasing, partially due to the softening dollar. There are also supply concerns – the naphthalene situation is the most obvious – and there is a sense from some pigment manufacturers that prices are due to increase.

Should that be the case, ink companies will have to decide whether they can absorb these increases or pass them along to printers. Knowing that the price of a barrel of crude oil is also escalating at a level nearly 50 percent higher than last September, it is likely to be a difficult time ahead for ink manufacturers.
David Savastano
Ink World Editor