Print Week reports on Flint Group’s warning that printers should expect ink and consumables prices to rise as the cost of certain raw materials increases, with Jan Paul van der Velde, Senior Vice President of Procurement at Flint Group, explaining that "different cost drivers are having different effects in different market segments", and that "the key issues revolve around publication inks, given the situation of rising process for gum rosin and crude oil based products".
He added that in the first half of 2013, as many raw materials went up in price as came down, with crude currently trading at around $110 per barrel – above the level forecast at the end of 2012. The price of materials in the base chemical markets, such as benzene, styrene, toluene and xylene, which are used for pigments and resins, also continued to rise during 2013 "despite low demand in these markets".
"Looking at third quarter developments, we have witnessed significant changes in some of our key markets since June and July with crude oil, gum rosin and pigments being among the key areas affected," said van der Velde.
The increasing price of oil has affected packaging and logistics as well as ink cartridges, with gum rosin prices in China escalating "dramatically" from July resulting in a 40% increase impacting on pigments.
Van der Velde said that "it is likely that prices will remain at the current levels or potentially even increase until such time as the next crop is harvested" due to the low stocks of crude gum rosin, adding that the conditions are "very similar to the situation in 2011 which resulted in gum rosin being traded at up to $3,500 per metric ton".
The significant increases in pigment costs, according to van der Velde, have "mainly been driven by the ongoing and increasingly stricter enforcement of environmental rules in China and India" – both for pigment suppliers and the suppliers of base chemicals for pigment production.
"It is clear the ink industry is again being confronted with the rising cost of raw materials and it does not look like this will quickly disappear. The result of these rising costs to some of the key raw material markets will inevitably have an increasing impact on the costing of publication inks".
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Source: Ink prices expected to rise
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