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May 26, 2010 12:00 AM
Flint Group reports that while market demand has increased (particularly in Asia), the economic revival has caused a supply / demand imbalance on the raw material markets.
“The economic collapse end of 2008 was followed by a significant destocking of most raw material supply chains. As a consequence, especially costs of base chemicals increased continuously since early 2009. All key raw materials the ink industry relies on, like Benzene, Toluene, Ethylene and Propylene, see double digit price increases,” the group reports. “Another factor driving up raw material cost is a number of ‘force majeure’ situations and key base raw material suppliers moving away from the ink industry, like Dow exiting its vinyl resin business.”
Flint cites capacity reductions impacting all areas of the industry, with packaging and narrow web ink markets similarly affected by global shortages in key materials such as acrylates or acrylic resins which are derived from acrylic acid: “While acrylic resins are a key raw material for water based inks, acrylates are the material more commonly found in UV inks and the issues described above are now causing significant challenges for water-based and UV based packaging and narrow web ink markets,” explains Jens Zimmermann, director, global marketing, Flint Group Packaging & Narrow Web. “To further compound this problem, the situation with the major raw materials for solvent-based inks is also worrying as solvents have also recently started to come under significant price pressure.”
The company reports, “It is very clear that most pigment intermediates will also see increased pricing, particularly blue and red while, materials like TiO2 and many specialty chemicals will also follow the same trend.”
Zimmermann concludes, “We are conscious that our customers are not having an easy time at the moment and many raw materials together with energy and transport will continue to rise. We at Flint Group are not exempt from this phenomenon, and even though our technical team is constantly searching for ways to mitigate these effects, we ourselves are incurring tremendous increases despite our ongoing cost containment programmes. We intend to continue closely monitoring the situation, keeping our customers fully informed of developments.”