Since the end of 2000, most printing ink manufacturers have found very little to cheer about from their business. During the past three years, the slumping economy has taken its toll in the U.S., and ink companies have felt the effects of the printing industry’s declining fortunes, particularly on the publication and commercial side.
At the end of 2002, there had been a glimmer of hope that the ink industry would see a better 2003, as margins improved slightly and the fourth quarter saw an increase in volume. However, the first six months have brought more bad news to the ink industry. According to the National Association of Printing Ink Manufacturers (NAPIM), the volume of ink sold on the publication and commercial side in the first six months of 2003 has declined 2.9 percent year-to-date. Even worse, ink sales are down 5.1 percent, which signals further erosion in the price of ink.
Breaking those numbers down further, the volume of heatset ink sold has been flat, although prices have dropped 5.2 percent. The worst news has been in publication gravure, where volume is off 10.6 percent year-to-date, while the dollar value has dropped 13 percent.
The packaging side has traditionally fared better in a slumping economy, and that is the case again during the first six months of 2003. Packaging inks have declined 0.8 percent in volume, while prices have dropped slightly faster at 1.6 percent. The good news is that solvent-based flexo inks are continuing to make gains, particularly in the flexible packaging segment, with volume increasing 3.7 percent and the dollar value up 4.0 percent. Water-based gravure inks are also up significantly although that is primarily due to it being a fairly small segment of the ink business.
Also on the down side, water-based flexo has ben hit hard, with volume down 5.7 percent and sales off 7.0 percent. A major reason for the decline in water-based flexo can be found in the present shift in manufacturing jobs overseas; where manufacturing occurs, so does the packaging, and U.S. corrugated printers are feeling the pressure.
On a positive note, the Printing Industries of America (PIA) believes this year has been slightly better as a whole for its industry, and has high hopes for 2004. While we’ve heard similar predictions in recent years, we can only hope that this upward trend does continue for printers and is shared by ink manufacturers in the very near future.