In recent years, stable pigment prices have helped ink manufacturers weather surging crude oil prices. The elimination of the VAT refunds on pigments in China is changing all of that.
David Savastano, Ink World Editor09.11.07
Pigments are the most expensive ingredient in a printing ink. In recent years, prices have been
Photo courtesy of Ink Systems.
relatively stable compared to petroleum-based products, as ink manufacturers sought to find alternate, less expensive pigment sources to try to offset higher costs. In many cases, that meant importing pigments from Chinese companies, which in addition to having lower production costs, also received up to 13 percent VAT refunds on exports from the Chinese government.
However, the recent decision by China to eliminate or significantly reduce VAT refunds on pigments, pigment intermediates and other key raw materials poses a real challenge to ink companies. Chinese pigment producers tend to work on low margins, meaning that there is little room to take in that 13 percent. That means higher prices.
The impact can be seen throughout the pigment industry, as Clariant, Ciba Specialty Chem
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