As a result of the pandemic, packaging ink suppliers are facing increased prices on pigment raw materials, petrochemical price increases and supply constraints, and higher freight costs due to the reduced availability of containers.
“Already in 2021 we are seeing a combination of several factors which are interlinked with the COVID-19 crisis which has severely impacted the overall raw material supply chain,” says Dr. Arash Babai, director of global purchasing for Siegwerk, a manufacturer of printing inks.
“Our team is working hand-in-hand with our global supply chain to leverage its buying power and minimize risks to our customers.”
According to Siegwerk, prices around the globe have seen sharp increases in the first quarter for pigment raw materials, including titanium dioxide (TiO2). Key drivers for the increases include high demand across all industries, greater domestic supply requirements and broad demand pressures, and higher costs.
While the actual costs vary widely from region to region, higher than average per ton costs have been aggravated by significantly higher freight costs.
“Beyond these developments, we continue to see broader market momentum in other pigment categories, such as carbon blacks, metallics, and coloured pigments. In fact, we have received price increase notifications from multiple strategic suppliers,” adds Dr. Babai.
Similar to pigments, petrochemical raw materials, which include UV resins, polyurethane resins, solvents and acrylic resins, have recently experienced higher prices beginning in Q2 2020. This is as a result of shortages of epoxy resins and higher demand for polypropylene glycol in flexible foams and acrylic acids, among other things.
All have seen increases at varying rates depending on the location. In addition, due to the ongoing freight constraints, Siegwerk is experiencing longer delivery times and ongoing higher container shipping costs.
The underlying issue affecting much of global commerce is the disruption in the world’s shipping trade due to the erratic business requirements that the coronavirus pandemic has created for international customers.
The transport of shipping containers has become disrupted with many containers now in the wrong part of the world. The gap between customer demands and short supplies has resulted in a severe global shortage.