TAGS: Inks
Lack of availability of key raw materials and packaging, and significant price increases are causing significant disruption to the coatings and printing ink industries in the UK and across Europe.
There are four significant trends affecting raw material prices:
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Strong global market demand has led to shortages on many raw materials
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The oil price has risen by 58% since November (currently $68 a barrel)
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The global shortage of shipping containers has led to a sharp rise in transport costs from Asia to Europe thus further restricting supplies to Europe
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Additional non-tariff costs related to the new UK customs arrangements with the EU are adding to the cost of imported raw materials into the UK from Europe
However, there are also some specific reasons for some of the recent increases.
2021’s Biggest Issue for Coatings, Ink Sectors
Solvents are one category where prices are going through the roof. Some examples in BCF’s monthly raw material prices survey shows the largest increases in solvent prices in January 2021 versus 12 months ago are acetone (123%) n-butyl acetate (91%), IPA (41%) and n-butanol (54%). A critical issue here are two force majeures at major chemical plants producing butyl acetate.
In January, BCF issued a press release reporting sharp price increases for epoxy resins, of as much as 60% in Q3 2020. Similar problems are affecting the market for polyester resins with factory closures in Singapore and Sweden as well an explosion at a factory in China adding to the difficulties.
There are also problems with bisphenol-A with stocks being diverted to polycarbonates. Neopentyl glycol and methanol are also both reported to be in short supply.
Concerns have also been raised about pigment shortages, such as red and yellow iron oxide. Plastic polymers are also in short supply, affecting availability and prices of packaging, with 5L paint cans 10% higher than at the same period last year, and tin plate has had a similar increase.
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Given that raw materials and freight comprise the majority of the overall cost to produce paints, coatings and printing inks, this trend will have a major impact on the operations of BCF member companies,” said BCF CEO Tom Bowtell.
“Where possible, BCF members will seek to mitigate higher costs via internal process optimization measures, alternate sourcing and increased efficiencies”.
Source: BCF