Higher Raw Material Costs, Supply Concerns Worry Ink Manufacturers

By David Savastano, Ink World Editor | 09.16.11

Every September, Ink World publishes our annual Buyers’ Guide, the industry’s most comprehensive listing of raw materials, equipment and services, as well as key data and contact information for allied suppliers. In addition to our September/October issue, our Buyers’ Guide information can also be found on the web at www.inkworldmagazine.com.

The subject of raw materials has become a huge topic for ink manufacturers, and it is fitting that our Buyers’ Guide is accompanied by our annual Raw Material Report. It is such a major concern that European editor Sean Milmo also examines the issue in his article, Raw Material Prices and Supply Continue to Impact Europe.

It should come as no surprise that ink industry executives I spoke with are concerned about raw materials. The simple reality is that costs are increasing while supply of certain key raw materials is tenuous at best.

The reasons for short supply of certain key raw materials are well known and have been repeated time and again. In brief, supply has tightened due to the recession, as some companies left markets while others took out capacity. Meanwhile, demand for some key ingredients has grown, whether it is in alternative industries or in growing regions such as the Asia-Pacific.

As supply shrinks and demand increases, prices rise. The ink industry is no longer a preferred customer for some of these goods, and ink companies now have to pay a premium to get many of the goods that they need. Ink industry leaders noted that improvement in the raw material market is not likely any time soon.

As I mentioned before, there are areas of increasing demand for products, most notably the Asia-Pacific region. In particular, China continues to show strong growth, and its printing industry is expanding at approximately 9 percent annually. For ink manufacturers, the Chinese ink market is one of the most promising; as I note in my article, Chinese Ink Industry Continues to Enjoy Growth, global and domestic ink companies alike are sharing in those opportunities.

David Savastano
Ink World Editor