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    Blog

    Prices are On the Rise in the Ink Industry

    Higher raw material, transportation costs are driving the latest round of price increases, and there are likely more to come.

    Prices are On the Rise in the Ink Industry
    Source: Siegwerk
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    David Savastano, Editor03.04.21
    The printing ink industry is well known for being reluctant to raise prices except when under pressure, as their printing customers are equally known for tight margins. However, recent comments are signaling that price increases are ahead.

    It should be noted that not every ink company announces when prices are going up, but typically, higher costs from raw materials and/or transportation impact every company. Reports from Sun Chemical, Flint Group, Siegwerk, the National Association of Printing Ink Manufacturers (NAPIM) and the European Printing Ink Association (EuPIA) are highlighting the challenges ahead for the ink industry.

    EuPIA’s and NAPIM's Insights

    It is not unusual to see ink companies offer statements about pricing pressures. EuPIA’s move in mid-February to provide its comprehensive analysis gives a serious perspective on what is happening within purchasing departments throughout the ink industry.

    EuPIA pointed to “the increased cost of pigment raw materials, tightening upstream petrochemical supply chains, cost increases for vegetable oil derivatives and dramatically increased freight costs – due to the reduced availability of containers – are highlights of a myriad of destabilizing factors.”

    One area of concern: TiO2. EuPIA reports that due to short supply, there are extended lead times. Petrochemicals are another challenge. Prices are rising, driving up costs for feedstocks and resins, as well as also impacting the cost of color pigments.

    EuPIA also offered some interesting details on other issues. For example, vegetable oils and derivatives are facing higher costs, which impacts alkyd resins and esters.

    “From Q4 2020 and continuing into 2021, there has been an astounding vegetable oil price rally to six-year highs due to several developments compounding together,” EuPIA wrote.

    “Palm oil production is at a three-year low while palm oil stocks worldwide are at low levels; the soybean oil complex turned from a surplus to the deficit with unfavorable weather conditions in the US and drought damage in Latin America reducing both production & supplies - also Chinese imports and consumption has risen more sharply than expected. All these factors have impacted the cost of vegetable oils and their derivatives such as alkyd resins and esters which are the main backbone of paste ink used in both packaging and publication printing.”

    The issue of containers being stranded at ports after shipping schedules were disrupted by the COVID-19 pandemic is also interesting. Per EuPIA:

    “As a result, containers have been sent to ports around the world where they have become stranded; many containers are now in the wrong parts of the world or off-beat ports. The inequities between customer demand and short supply have resulted in a severe global shortage of freight capacity. For perspective, prices of containers between China and Europe have risen more than 400% since Q4 2020.”

    NAPIM discussed its own concerns about the challenges facing the ink industry.

    “The printing ink industry in North America is facing unprecedented challenges in raw material feed stocks, supplies and freight,” wrote John Copeland, executive director of NAPIM. “Virtually all raw material families for the printing ink industry, including oil, energy curable, solvent, and water-based systems have been greatly impacted.”

    Ink Companies Report on Costs

    As I mentioned above, not every ink company will announce higher costs, but when Sun Chemical, Flint Group and Siegwerk both take note of their concerns, you can figure the entire industry is in the same boat.

    Effective March 15, 2021, Sun Chemical will increase North American prices across a range of products, including packaging and commercial sheetfed inks, coatings, and adhesives. The leading ink manufacturer cited short supply of petrochemicals, vegetable oils and derivatives, as well as higher international freight costs and increasing demand.

    “These unprecedented dynamics have resulted in significant inflationary pressure which requires us to raise prices to offset these costs,” said Chris Parrilli, president of North American Inks, Sun Chemical, in announcing the rising ink prices. “We will remain focused on supplying our customers with best-in-class solutions.”

    In addition, Sun Chemical Latin Anerica anounced 10% price increases on its sheetfed product and 5% on its energy curable portfolio.

    “Due to recent market dynamics, we are forced to increase the prices to offset the raw material and transportation increases,” said Fernando Tavara, president, Sun Chemical Latin Americain anouncing the increases.

    Effective April 1, 2021, Flint Group Packaging is planning on increasing prices of its inks and coatings. The company cited higher costs and tighter supply in numerous areas, including pigments, resins, solvents and freight. The compnay also announced increases for its Day blankets and Varn chemical products.

    “The unusual set of supply chain conditions currently witnessed are some of the most severe I have seen,” Doug Aldred, president of Flint Group Packaging Inks, reported in announcing the inks and coatings price increases.  “Our business is facing substantial cost and availability headwinds, across multiple raw material categories. Resins, solvents and pigments (including titanium dioxide), are particularly problematic.”

    “Regrettably, despite our tenacious efforts to offset cost and risk for our valued customers, the pronounced and prolonged pressure – experienced in some categories since mid-2020 – has forced us to act. Some raw materials, such as UV resins, additives and pigments, are reaching cost peaks not witnessed in the last ten years or more,” added Emmanuel Bareaud, president of Flint Group Narrow Web.

    While Siegwerk did not mention price increases in its release, the packaging ink specialist pointed to many of the same root causes as Sun Chemical did, including higher pigment and petrochemical prices, supply issues for petrochemicals as well as higher freight costs.

    “Already in 2021 we are seeing a combination of several factors which are interlinked with the COVID-19 crisis which has severely impacted the overall raw material supply chain,” said Dr. Arash Babai, director of global purchasing for Siegwerk, in the company’s release. “Our team is working hand-in-hand with our global supply chain to leverage its buying power and minimize risks to our customers.”

    In particular, Siegwerk noted that TiO2, carbon blacks, metallics and colored pigments, and Dr. Babai said that Siegwerk has received price increase notices from multiple suppliers. In terms of petrochemicals, prices are rising for key ingredients including UV, acrylic and polyurethane resins and solvents.

    Freight is an interesting category in that, in addition to transportation costs, Siegwerk noted that there is a shortage of shipping containers.

    “While the overall situation is constantly changing, Siegwerk is devoting all available resources to ensure our supply to customers is uninterrupted,” Dr. Babai concluded.

    Suppliers Issue Price Increases

    On the supply side, there were some announcements of note that will impact the ink industry. Ingevity Corporation, a major resin producer, announced that it would be raising prices from 10% to 15% on all merchant and derivatized tall oil rosin and tall oil fatty acid products as of April 1, 2021.

    These are critical raw materials for certain ink resins. In this case Ingevity cited both customer demand and higher raw materials costs.

    On the specialty pigment side, ECKART announced its first price increase in a while, beginning March 1, 2021. Noting it has absorbed previous price increases through improving efficiency, the metallic and special effect pigment producer reported that
    recent above-average increases in chemical, transport and packaging costs is forcing it to raise prices on its pigments. 
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