Ink and blanket costs under pressure

Printers may be facing significant rises in the price of inks, as raw material costs for ink have started to move up significantly after a relatively stable period for crude and other materials. Blankets too are under pressure for the same reason, however the rising strength of the Aussie dollar may mitigate against some rises.

No local ink suppliers were returning calls to Australian Printer, apart from Ian Johns, managing director DIC Graphics, who had no comment.

Flint Group has cautioned a rise in the customer cost for ink is on the way. Jan Paul van der Velde, senior vice president Procurement, IT and Regulatory of Flint Group says the main reasons given for this rise are crude increases year over year of 50 per cent, major increases in 2016 on costs of chemical building blocks, environmental actions by the Chinese government to reduce air pollution, several Force Majeures such as the fire at the Hunstman TiO2 factory in Finland, currency and trade challenges, and increased cost of sea freight due to supply reduction of available shipping routes.

Velde says, “The ink industry is confronted with a global shortage of sulphate-based TiO2 due to the fire at Huntsman’s Finland facility, combined with the reduced output from China. TiO2 costs were already on an upward trajectory, and our suppliers have told us that the market as a whole is short by 30 per cent.”

Going into detail on how different inks are affected, Velde says, “We have seen increasing challenges in availability of pigment intermediates, which drives costing on all three primary colours. The domino effect reaches all inks we manufacture, but predominantly our Print Media offset inks.

“A factory fire in China has led to a short supply of diketene, used for yellow pigments. Naphthalene supply is tight due to environmental action, causing challenges for red pigment manufacturing. Costs of copper and Phthalic anhydride, both key intermediates for blue pigments, have increased, causing increased costs to produce blue pigments.

“For oil-based inks (sheetfed, heatset and coldset) the key challenge is the increase in crude oil pricing, which has led to cost increases of key materials, including 10 per cent on carbon black, 5 per cent on hydrocarbon resins, and 20 per cent on mineral oils since Q2 2016.”

“Costs of many solvents have also increased, which affects the cost of manufacturing pressroom chemicals and solvent-based inks.

“Flint Group’s cost of manufacturing water-based packaging inks has been hit by cost increases in styrene (35 per cent) and acrylic acid (12 per cent), two key ingredients used to make acrylic resin, which is the base for a water-based ink.

“For UV inks, Chinese production limitations has resulted in cost increases between 8 and 10 per cent for photoinitiators, monomers, and oligomers.”

“Flint Group’s printing blanket business has been hit significantly by major cost increases in rubber chemicals. Butadiene, a key rubber ingredient for the blanket the flexographic plates businesses, has tripled in cost since Q3 2016 and new cost increases have been announced this week. In addition, costs of another rubber chemical, acrylonitrile, rose by almost 35 per cent.”

Velde is confident Flint Group will be able to ensure supply at competitive prices for the environment saying, “Flint Group will work closely with our suppliers and customers to plan for and mitigate the volatile raw material trends we face.”

Raw materials to offset blankets are also riding, however Mamdooh Sidhom, managing director, National Blanket Converters, which supplies to 60 per cent of the offset printers in Australia, says “Our manufacturers have told us that the costs of materials for blankets would be rising, however we have not increased our prices at all. A strong Aussie dollar against the Euro is helping us with our European manufacturers, and we have no plans to increase costs to customers.”

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