Flint: supply chain issues could last all year
Tuesday, August 17, 2021
Flint Group has warned that the global supply chain issues are continuing to have “a direct impact” on supplies to Europe and North America, with further price increases likely as a result.
Just last month Tony Lord, the president of Flint Group’s Commercial, Publication and Sheetfed Inks (CPS) division, said that there “seems to be no end to the ongoing raw material availability crisis” for ink makers. He warned that rising costs and reduced availability of raw materials continued to be a concern for the company.
Now Flint’s global supply chain director for CPS Inks, Vijay Patel, has issued a further bulletin detailing the ongoing woes in the global ocean shipping market, including issues at international ports due to Covid outbreaks and container shortages.
Patel stated: “At present, there is no evidence that the situation is going to stabilise any time soon. The demand of the steamship lines is on the rise as increased demand driven by economies opening and unprecedented money supply to various sectors last year created a perfect storm for the supply chain disruption.
“While there is demand from the market and the willingness to pay there is no incentive for the carriers to ease the situation.”
Although Flint has moved to increase local stocks of key materials, and to review alternative supply from local markets, during Q2 European road haulage also proved problematic due to the well-documented shortage of HGV drivers.
There is also an anticipated imbalance of supply and demand in North America, “which is expected to continue into early 2022, impacting services and availability”.
Flint also highlighted recent spike in the price of Brent Crude Oil and West Texas Intermediate (WTI) oil, which have “created a negative impact on the general cost increase related to diesel surcharge”. Both Brent and WTI moving trend is forecast to continue till end of the year, the group said.
Patel added: “We have seen force majeure scenarios in a number of sectors and suppliers only willing to guarantee fixed proportions of their capacity. Global logistics, crude and supply constraints and cost increases have all resulted in costs being passed throughout the supply chain.
“We are anticipating the disruption and cost impacts to continue to at least the end of the year with further price increases to follow as a result.”
Flint Group is headquartered in Luxembourg and had sales of €1.7bn (£1.45bn) last year. The business employs around 6,200 people worldwide and is the second-biggest ink maker in the world behind Sun Chemical.