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Business

Ink prices rise as China clamps down

Tougher environmental standards in China, in an attempt to battle its air pollution, are having a knock-on effect on the supply chain for the sign and print industries.

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Changes in Chinese environmental policy has had an effect on manufacturing across the world

Ink prices are set to rise again in Europe due to an increase in raw materials, Sun Chemical announced today. The firm is also attributing the necessary price hike to tighter environmental standards in China, where the majority of the specialty chemical industry relies on sourcing raw materials. The price rise covers both solvent and water-based inks from the specialist inks, coatings and polymer manufacturer.

In 2013, the Chinese government announced a campaign to drastically reduce the serious levels of hazardous particles in the atmosphere, known as PM2.5.

A few years later, the government announced its emissions trading system and began clamping down on factory emissions, capping emissions of particulate matter at 10 mg per cubic metre. Factories found not to be complying with the new standards are either fined, forced to halt operations or are shut down completely.

“The increasing raw material costs continue at an unprecedented rate and require us to increase customer prices,” says Felipe Mellado, chief marketing officer at Sun Chemical. “We will continue to work with our supply chain partners to manage and minimise the impact on our customers.”

The increasing raw material costs continue at an unprecedented rate and require us to increase customer prices

Mellado adds: "Most of the products will rise around four to five percent, but with certain pigments, like R169, the increase will be much higher. A big part of the raw materials or precursors for producing the raw materials employed in inks come from China. It’s not easy to minimise the disruption as in many cases China is the only producer of certain key materials. At Sun Chemical we leverage our size and our internal production capabilities."

The challenges facing the chemical manufacturers mean that some are now looking to move production outside of China to avoid these tariffs and standards. However, there are also concerns that the products will be more expensive outside of China, meaning further price hikes.

The issue with the changes in production regulation in China is how quickly it has occurred, leaving very little time for transition or further research in to the incomplete health data that China used to base its environmental targets on.

Rick Westrom, senior vice president of strategic resourcing at INX International, told Ink World in November that the ink manufacturer expects the issues with raw materials for ink to continue into 2019, adding: “Just when we see improvement, supply tightens up again as environmental plant closures continue to plague the supply chain as well as fire disasters impacting precursor supply.”

The new higher prices for inks from Sun Chemical are effective from January 19th, 2019. The firm is one of the world’s largest producer of printing inks and pigments as well as plastics and coatings for the sign and display industries.

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