Not coincidentally, we also feature our annual report on trendsfor raw materials for ink in this issue as well (please see “The Raw Material Report,” beginning on page 92). Purchasing leaders at ink companies tell us what they are seeing in the market, and what their expectations are for the coming months.
What these purchasing leaders are reporting is that the raw material market is showing some signs of starting to correct itself, as some price increases have been announced, particularly in products derived from oil and natural gas or those that consume significant energy.
Of course, there is a difference between announcing and actually sticking with price increases, especially as there is an oversupply of some key ingredients. Some ink companies say that they have noticed that certain price increases have not rolled back when energy prices have returned to lower levels,indicating that suppliers are trying to regain some profitability after a number of difficult years.
However, ink company officials are saying that most suppliers are working with them to try to keep costs down.
No one denies that the present pricing levels on printing inks and most key ingredients remain financially unhealthy. Ultimately, though, increases on some of the products will only occur if ink companies can also pass along increases to their own customers. If that does not occur, then ink companies will find themselves once again in the middle of a price squeeze that will further depress margins for both themselves and their suppliers.