Suppliers See Better Times Ahead, If Raw Materials Stabilize

By David Savastano, Ink World Editor | 05.17.11

Pigments, resins and additives are essentially the three main ingredients of ink. It should come as no surprise to anyone in the ink and allied industries that all of these ingredients are facing increasing volatility of raw materials cost and availability.

As I note in The Resin Report, beginning on page 18, and The Additives Market, starting on page 30, major manufacturers of resins and additives, whether they are waxes, defoamers, surfactants or other ingredients, are under tremendous pressure from their own suppliers.This isn't just about pricing, which is bad enough; availability is a huge issue.

The reality is that the global recession led to some key manufacturers of feedstocks and other ingredients to shutter capacity, and other suppliers to leave the market altogether. Now that there is an economic recovery underway, demand is increasing, but capacity is not.

This means that suppliers can select the industry they wish to sell their products to, and there are many businesses that are much larger than the ink industry. This is leading ink manufacturers and their suppliers to scramble to find certain ingredients, and have to pay a premium price for others.

The pigment industry is in a similar situation, as Sean Milmo discusses in his article, Shortages of Pigments Impacting European Ink Companies, beginning on page 14.

Having said this, the fact that the economy has improved for leading suppliers is very good news indeed.

Overall, there is a sense of optimism going forward among pigment, resin and additive manufacturers, with raw materials being the one major concern that could derail the sense of optimism. Only time will tell if the raw material situation will improve, or at least become less volatile, in the coming months.

David Savastano
Ink World Editor