The Market for Metallics

By David Savastano, Ink World Editor | 07.26.11

Metallics can help make products stand out on the shelf, and metallic ink and pigment manufacturers are enjoying growth. However, raw materials costs are a major concern.

Catching the eye of consumers is essential, whether it is on a package or a magazine, and brand owners are always looking for an edge. Metallics are a proven approach, and metallic ink and pigment manufacturers are seeing growth in their business. However, raw materials costs for metals remains a serious issue.

“It remains a difficult market, especially considering the cost of metals like aluminum and copper,” said Joseph Perdue, marketing manager, North America (Graphic Arts) for ECKART America Corp. “However, we are seeing a slight increase in demand, but the demand is less predictable than ever before. Raw material supply issues and cost increases, as well as concerns over the economy in general, continue to apply added pressure on the metallics industry.”

“The overall metallic pigments market rebounded in 2010 from the global recession of the previous two years,” said Aaron Hollman, global product manager – effect pigments, Sun Chemical Performance Pigments. “Sun Chemical Performance Pigments has seen this upward trend continue into the first part of 2011 with excellent growth for aluminum-based pigments in all market segments. However, there is still a high degree of uncertainty due to rising raw material costs and the challenging financial conditions in various countries around the world.”

Photo courtesy of ECKART.

“Volumes are once again trending up, however, not yet at the levels of 2008,” said Judith Goodwin, national sales manager, New Brook International. “We have been able to pick up several customers due to competitors discontinuing grades and/or shades. This said, it has been a challenging year due to the fluctuation of raw material pricing and the weakness of the dollar against the euro, which greatly influenced bottom line margins.”

“We have seen good growth and even though order income is still unsteady, Benda-Lutz is back near pre-recession levels,” said Walter Sauseng, technical service manager – pigments/R&D, Benda-Lutz Werke. “We are optimistic for the next fiscal quarters as several major customers are working on promising projects in newer applications.”

“Globally, we saw a tremendous recovery in the demand for metallic pigments and finished inks in 2010, and 2011 has started very strong,” said Thomas Schaller, vice president sales and marketing, Schlenk Metallic Pigments.

Raw Materials

Raw materials are a major challenge for ink and pigment manufacturers, and the same holds true for metallics. While availability is not an issue, the cost of raw materials is a concern.

For example, in July 2010, the cost of copper on the London Metal Exchange was approximately $3 per pound. In July 2011, copper was nearly $4.50 per pound, nearing its all-time high set in February 2011 of $4.635 per pound. That is a huge percentage change.

“In general, both raw material and conversion costs have increased significantly in the past year,” Mr. Hollman said. “Ever increasing energy, labor and material costs require us to not only innovate in terms of new product platforms and technologies, but also to innovate in terms of process and raw material productivity. The uncertain stability of the current market makes it essential that we focus our resources on projects that deliver the most value to our customers.”

“The cost of copper remains at relatively high levels,” Mr. Perdue noted. “Continued global demand for such resources, increased mining costs and the threat of inflation, all make the metals market very volatile. Generally, raw material prices continue to rise, and the supply for specialty products can also be erratic. ECKART’s primary aim is continuity of supply, and we are confident that, through our global infrastructure, we can continue to meet our customers’ demands.”

“More than issues with raw material availability, we have seen escalating prices for both powders and pastes, specifically with copper,” Ms. Goodwin said. “The high cost of fuel has also affected the end user cost of these pigments as well. We believe that lead times for manufacturing and freight issues will continue to prove challenging for this and all raw material markets.”

“Prices for all kind of raw materials and energy went up significantly so it’s increasingly difficult to keep prices constant,” Mr. Sauseng said. “Regarding our raw materials, we had no supply issue and don’t expect any in the near future. There still are limitations and longer delivery times for specialty grades.”

Key Growth Areas for Metallics

Metallics are used in all forms of printing, but metallic ink and pigment manufacturers are seeing particularly strong opportunities in the packaging field.

“We have seen growth in the areas of packaging and label printing, but generally the recovery of the ink market is slower than other markets where metallics are used (e.g. paints for automotive),” Mr. Sauseng said.

“We have seen growth both in the screen printing and packaging areas,” Ms. Goodwin said. “Packaging seems less prone to market fluctuation and downturns. There is also continued demand for high-end decorative paper products.”

“There are many growth opportunities for metallics in the graphic arts industry if companies are willing to look beyond the day-to-day and consider the wider picture of both the decorative and functional possibilities of metallic pigments and inks,” Mr. Perdue said. “Our society continues to be overwhelmed with choice in everything we buy. Metallics remain a key differentiation factor for packaging and point of purchase displays. The quality of the decoration on that package, in most cases, greatly increases the likelihood that one product is chosen over another. Metallics are a great way to catch the eye and also to improve the appeal of any product. For this reason, metallic and similar decoration options are always considered. As a leading supplier of effect pigments and inks to the global graphic arts market, ECKART continues to invest in new markets. For example, metallic inks are growing as alternatives to foils and metallized substrates, making this a strong growth area.”

“Emerging markets around the world such as China and the entire Asia-Pacific region, along with areas like Eastern Europe and India, offer a plethora of opportunities for us to grow our metallics business,” Mr. Hollman said. “In terms of specific market segments, we expect significant long-term growth in products designed for waterborne and energy curable inks. Therefore, we have focused a great deal of our R&D efforts in these areas.”

Conductive Ink Market

One area of interest to some metallic pigment and ink manufactures in the conductive ink field, which offers much promise for the emerging printed electronics sector.

Photo courtesy of ECKART.
“The conductive ink market has been growing at a fast pace over the past few years, primarily driven by the needs for metallization pastes for solar applications,” Mr. Hollman said. “With the cost of precious metals such as silver reaching unprecedented levels, there are certainly opportunities for alternative technologies using non-precious metals or alloys.”

Mr. Perdue said that ECKART sees opportunities for metallics in the conductive ink market.

“Currently, our conductive inks are still in an R&D stage and are not commercially available. However, our R&D activities in conductive ink arena exemplify our belief in the attractiveness of printed electronics,” Mr. Perdue said.

“Conventional metallics do not offer sufficient conductivity due to an isolating oxide layer on the surface of these pigments,” Mr. Perdue added. “Surface modifications and clever material solutions enable us to overcome this challenge in order to obtain conductive pigments and also conductive inks.”

New Metallic Products

Metallic pigment and ink manufacturers are continuing to develop new products that can make a difference in the marketplace. For example, Mr. Hollman said that Sun Chemical has invested a great deal in the development of new aluminum pastes, preparations and encapsulation technologies for its SunMetallics line.

“We have expanded our product offerings for solvent-based gravure and flexo and continue to develop new products for water-based systems and energy curables,” Mr. Hollman added.

Mr. Perdue said that RotoStar UV Shrink Silver, based on new high-end silver dollar pigment, is ECKART’s latest technology, offering a highly functional aluminum effect with premium added benefits of brilliance and reduced cost.

“It has unique capabilities of maintaining metallic effect without going dark in shrink applications,” Mr. Perdue said. “Once again, ECKART continues to listen to the users in the flexo market, where there is a high demand for metallic effects in the growing market of shrink-sleeve and film labels. MirrorGold, a new solvent-based gold metallic ink, and PlatinStar, a new solvent-based silver metallic ink, have been designed for gravure and flexo printing to provide mirror-like effects, unachievable in the past, specifically for the flexible packaging, film laminations sector of the industry.”

“We have introduced a new 15 micron non-leafing aluminum, a very fine 3 micron leafing aluminum (popular with the marker/aerosol customers due to concern regarding nozzle size), and a UV compatible aluminum paste,” Ms. Goodwin said, “We have seen more interest in the UV compatible pigments than in the conductive inks.”

Expectations for Metallics

Metallic pigment and ink manufacturers anticipate growth in the coming year, as end-users see opportunities to use metallics in their products.

“My expectations are for continued slow growth,” said Ms. Goodwin. “I do not expect dramatic escalation in demand, but I do believe that the metallic ink market will continue to inch upward, and hopefully the crafts and decorative paper areas will improve as preparations for the holiday season begin.”

“Metallics continue to be a preferred door opener for new products to catch attention and attract the end-consumer, so we remain excited and optimistic with the future,” Mr. Perdue said. “At the same time, customers continue to push higher demands on us in many areas, so ECKART expects ever increasing challenges for 2011 and beyond. The metallic market is continuously pressured to create more advanced effects and be more cost effective against alternative decorating choices. New manufacturing capabilities in manufacturing metallic flake are just beginning to deliver the next generation to the market, so we expect a great future with these technologies.”