Rapidly rising prices for raw materials are to push up printers costs for products such as inks, consumables giant Flint Group has warned.
Senior vice president of procurement Jan Paul van der Velde told PrintWeek: "Certain raw materials prices are increasing fast. How this will impact the current commercial agreements will differ case by case. What is key is the impact will ultimately flow through into the market.
"Different cost drivers are having different effects in different market segments. The key issues revolve around publication inks, given the situation of rising prices for gum rosin and crude oil based products."
He said despite hopes prices would fall this year, the price of crude went up. In the first half of this year as many raw materials went up in price as came down. Crude today trades at around $110 per barrel, significantly above any level that people had forecast at the end of 2012.
"In the base chemical markets materials such as benzene, styrene, toluene and xylene, important as building blocks for many material categories such as pigments and resins, prices again continued to rise in the first part of 2013 despite low demand in these markets.
"Looking at third quarter developments, we have witnessed significant changes in some of our key markets since June and July with crude oil, gum rosin and pigments being amongst the key areas affected."
Oil prices not only hit inks but services such as packaging and logistics, he said. Gum rosin prices in China began to escalate dramatically from July, with a 40% hike impacting on pigments and Flint's hydro carbon/phenolics based ink portfolio - heatset, coldset, sheetfed and gravure inks.
"Given the relatively low stocks of crude gum rosin, it is likely that prices will remain at the current levels or potentially even increase until such time as the next crop is harvested. This is very similar to the situation in 2011 which resulted in gum rosin being traded at up to $3,500 per metric tonne."
He said: "Finally, we have also seen significant increases in pigment costs. This has mainly been driven by the ongoing and increasingly stricter enforcement of environmental rules in China and India - both for pigment suppliers and the suppliers of base chemicals for pigment production."
"It is clear the ink industry is again being confronted with the rising cost of raw materials and it does not look like this will quickly disappear. The result of these rising costs to some of the key raw material markets will inevitably have an increasing impact on the costing of publication inks."Tweet