Right after the global recession of 2008, raw materials were a headache for the ink industry, although the past few years have seen prices and availability stabilize. For the most part, this has been the case during 2016 as well.
   
“In general, raw material industry has balanced out but are showing some signs of tightening, mostly upstream,” said Jan Paul van der Velde, SVP procurement, IT and regulatory – Flint Group. “We are experiencing ongoing challenges in volatile markets due to the global unrest, including security concerns, global trade deals, presidential elections, Brexit, etc.”
 
“Overall, 2016 has been a favorable year for raw materials in terms of cost stability and supply performance – although recently we have started to see some increased volatility with costs,” said Jeffrey Shaw, chief supply chain, quality, and business improvement officer, Sun Chemical. “Raw materials prices continue to benefit from the soft global economy, but we are now starting to see oil prices increasing as the year comes to an end due to restrictions on output. Supply performance has also reflected adequate supply/demand balances for most of the key raw material value chains; however, we have seen tightening supply in some solvents, particularly in Europe, that have led to spikes in pricing and perceived tightening of TiO2 supply.
   
“Since many global commodities are priced based on the US dollar, countries who have seen their currencies weaken over the last year or so, have also experienced significant cost impacts for those globally priced feedstocks and raw materials. The weakening of the British pound versus both the US dollar and the euro would be a significant example seen in 2016 impacting the cost of imported goods into the UK,” Shaw added.
   
Ken Klug, director of purchasing for Wikoff Color, reported that overall, raw materials have remained stable throughout most of 2016.
 
“Within the third quarter, a couple of commodities have encountered supply constraints due to outages and planned maintenance,” Klug pointed out. “The market for primary derivatives used within inks and coatings continues to see an upward trend, and we expect this to sustain at a gradual pace into Q1 2017.”
 
“There is a constant situation with key raw materials, related to fluctuation in pricing and availability,” Heiner Klokkers, management, Europe and South America for hubergroup, reported. “Gum rosin, oil, TiO2 and some solvents are keeping us busy.”
 
Shaw noted that there has been relentless pressure on TiO2 as quarterly price increase announcements continue.
   
“The initiatives are global and suppliers intimate that the activity will continue until an acceptable level of profitability is achieved,” Shaw observed. “As crude oil values increase, it directly impacts those raw materials that are closely tied to oil, such as distillates, ink oils, and carbon black. Also, the olefin markets have been somewhat volatile recently, which could put pressure on materials produced from those feedstocks such as solvents and various resins. In general, as crude oil escalates, there will be pressure on a variety of raw materials directly and indirectly. Undoubtedly there will be some unexpected pressures that emerge due to supply issues we are not aware of today.”
   
In terms of pricing, van der Velde said there are some raw materials that are of concern for ink manufacturers.
   
“TiO2 sellers have announced significant cost increases, and some pigment intermediates remain challenging, mainly due to supply issues for both yellow and red (for different reasons),” van der Velde added. “Diketene and, therefore, arylides are in short supply for pigment production. This has been driven by Force Majeure in the supply chain. Bon acid supply for red pigments remains a major concern, driven by environmental challenges.”
   
Tadashi Nakano, manager, Global Innovation Division at Toyo Ink Co., Ltd., said that Toyo Ink is expecting stability in the oil price, so raw materials prices might stay on the same levels for a whil
 
“There is an increasing demand for chemically safe raw materials,” Nakano added. “Since reliable suppliers are limited, the prices of those raw materials might increase depending on the demand.”
 
“We are really concerned about the raw material cost increases that have been currently announced and talked about for the near future,” Rick Clendenning, INX International Ink Co.’s president and CEO, said. “This will hurt everyone. Our customer base does not feel materials are going up at all, and are still under a lot of price pressure themselves with their own markets.”