Perfect storm will push up ink and varnish prices
23 Feb 2021 06:00

Ink producers are facing a perfect storm that will inevitably lead to printers paying more for the ink they use. Sun Chemical has already announced price rises from 1 March across packaging and sheetfed inks, coatings and adhesives. 

Sun has been joined by Siegwerk, citing a similar combination of sharp price increases for pigments, shortage driven price increases for resins and solvents derived from petrochemicals and increasing costs of transport.

Sun Chemicals blames a combination of raw material shortages, shipping costs and rising demand as economies recover. Nicolas Bétin, Sun Chemicals’ director for product strategy EMEA, says: “The pressure across the supply chain is causing an abrupt rise in raw material costs and unfortunately requires us to increase customer prices. We will continue to work with our sourcing partners to manage and minimise the impact on our customers.”

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. “Our team is working hand in hand with our global supply chain to leverage its buying power and minimise risks to our customers.”

The underlying issue is the shortage of shipping containers, the result of economies shutting down last year leaving the standard unit for transportation by sea scattered across the globe, but not in Asia where they are needed. Costs of moving a container from China to Europe have risen from $2,200 in October to $8,000 now according to a study published in The Economist.

Demand has also played a role driving up pigment costs, including that for titanium dioxide, says Eupia, the federation of European ink makers. Demand for the crucial white pigment has soared, putting further pressure of supply to the ink and paint supply industry.

Shipping issues are pushing delivery times out and adding to costs for other components of litho, water based and inkjet inks. Palm oil production is described as at a three-year low while global stocks are low at the same time as soy bean oil production has suffered from unfavourable weather in the US and drought in Latin America. This is compounded by rising demand from China which has had an impact on the cost of vegetable oils and derivatives “such as alkyd resins and esters which are the main backbone of paste ink used in both packaging and publication printing” says Eupia.

Prepared on the basis of information from Print Business