As the Chinese government decided to abolish or substantially reduce tax rebates on pigments, pigment intermediates, and other key raw materials, and the Chinese government announced the closure of a group of heavily polluting small and medium-sized enterprises, this caused, to a certain degree, strain on the supply of pigments, resulting in ink prices. Another new high, at the same time, makes ink companies in various countries face more severe tests, and lead to a sudden increase in production costs of printing plants.
It is well known that pigments are the most costly component of printing inks. In recent years, its price has been relatively stable, but with the linear rise in the price of petroleum products, ink manufacturers have also begun to look for new pigment alternatives to offset the ever-increasing production costs.
In many cases, ink manufacturers will choose to import from China, which will not only reduce their production costs, but also enable them to receive government subsidies (return export VAT not exceeding 13%).
With the rising price of ink, the market has already felt the impact of China. Obviously, pigment manufacturers must transfer some of their costs to others. Ink manufacturers, including Flint Group and Sun Chemical, can only choose to implement price increases because they cannot tolerate the continuous rise in raw material costs.
Diane Parisi, vice president of supply chain at Flint Group, pointed out that many important fields have been affected, including pigments, intermediates, special chemicals (such as photo-initiators commonly used in UV inks), resins, waxes, and clays.
Jyoti Gidvani, Head of Materials at Germany's Siegwerk Group, said: “Although all pigments produced in China have experienced price increases, we are most concerned about azo red and yellow pigments.†It is understood that the Shengweike Group is a A 178-year-old German company specializing in web and gravure inks as well as sheet-fed and UV-wrapped inks.
According to Ed Pruitt, chief procurement officer of Sun Chemical, China's new policy will affect 2,831 products. In addition to pigments, other products may also have an impact on ink prices, such as vegetable oils and organic and inorganic chemicals.
Environmental issues are intrinsically linked to prices. Filian Group's Parisi said: "In the past few weeks, we have received a lot of notices on the price of raw materials, the specific increase in 5% to 30%, and this is mainly due to environmental factors. â€
Sun Chemical's Pruitt pointed out that as the Chinese government begins to severely crack down on manufacturers that pollute the environment, many manufacturers of pigment intermediates, especially those of carbonamines and beta-naphthols, will suffer.
Jin Guanghong C (pigment) is a good example. China's newly introduced taxation and environmental policies have caused a shortage of this key raw material supply, and its prices have also increased at an unprecedented rate.
One of the main problems that ink suppliers are currently facing is: Long-term dependence on imports has left their own paint companies on the verge of extinction. Then, as Chinese pigment prices continue to rise, where will they go to buy cheap pigments? Is it India or other Asian countries?
In fact, there are many alternative sources for ink suppliers. Large buyers such as Sun Chemicals have begun to withdraw from the Chinese market, which has caused their costs to surge, and instead sought a more stable and economical source of materials.
Nevertheless, for many ink companies, China has become their most important supplier of raw materials, and it will continue to exert its tremendous influence on the world ink market.