Flint Reports Factors that can Drive up Ink Costs

By: Jim Rosenberg The Flint Group released a report Wednesday pointing to factors likely to drive up ink costs -- for starters, noting increased market demand, especially in Asia, and the raw-material markets' imbalanced supply and demand. "The economic collapse end of 2008 was followed by a significant de-stocking of most raw-material supply chains," the report states. "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, have seen recent double-digit price increases." Also driving up raw-material cost are "force majeure situations and key base raw-material suppliers moving away from the ink industry." Not all inks are always equally affected, but pricing of crude oil and its derivatives can affect inks' carriers, pigments and more. Flint Group says capacity reductions "are affecting all areas of the industry." The forces' impact on newspaper litho and flexo inks remains to be seen. With respect to the report, Flint spokeswoman Kim Stone could not comment on news inks in particular, noting that "the raw-material make-ups of the inks are quite different -- even within the web offset world." An acrylic resin shortage is hitting the packaging and narrow-web sectors. The resins are an important ingredient of water-based inks and are commonly found in UV inks. (Black newspaper flexo ink, for example, contains styrene acrylic resins, as well as some polyethylene wax dispersion.) For solvent-based inks, the raw-materials situation also is "worrying," according to Flint's report, "as solvents have also recently started to come under significant price pressure." That can mean "most pigment intermediates will also see increased pricing, particularly blue and red," the report states. The report quotes Flint Group Senior Vice President, Procurement, Jan Paul van der Velde saying the situation "is related to demand and increasing crude costs," with "a number of solvents... on allocation." The report concludes with remarks by Flint Group Packaging & Narrow Web Global Marketing Director Jens Zimmermann: "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 programs. We intend to continue closely monitoring the situation, keeping our customers fully informed of developments."