Development Status and Prospect of China's Ink Market in 2006

In 2005, the price has the greatest impact and the product has been improved

Faced with price increases, companies hold different views

On September 23, 2005, Sun Chemical, the world's largest manufacturer of printing inks and pigments, announced that the company’s sales price in North America will increase by 9% to 12%, and it is planned to be implemented from October 1, 2005. The price increases include inks, varnish, fountain solution and other printing chemicals provided by the company. In addition, Sun Chemical is also preparing to collect additional fees to cover the costs of energy and transportation. In December 2005, the United States announced that it had implemented a second price increase since January 1, 2006. The price increase products included inks, coatings, aqueous solvents, and other printed products. Undoubtedly, the ink industry is facing great difficulties. The price of oil and natural gas continues to grow rapidly, and many key raw materials are in short supply.

Harvey Brice, Managing Director, Superior Printing Ink Company: The shortage of raw materials is a serious problem because petrochemicals are used in production but it is not known how the price and supply of petrochemical systems will change in the future. Some ink solvent prices have reached historical highs, and companies can hardly make profit, nor can they digest price growth. The ink industry is about to enter a very difficult period.

Bryce Kristo, CFO and Senior Vice President, INX Ink: INX Ink has to find low-cost, high-quality raw materials globally. The increase in the cost of ink production allows us to ensure profits only by raising the price of ink. The global economy drove the rising price of oil, and the entire industry was unable to stop the growth of some raw materials and the scarcity of supply.

McDowell, President of Color Converting: We conduct a comprehensive and reasonable research at the product design stage to conduct proper production. We cannot use higher-cost raw materials because customers also have insufficient profit margins. Although customers will also purchase materials such as resins, additives, solvents, etc., they will understand why our products will increase their prices. However, this new trend in the development of strong inks does not mean that we can freely increase the prices of our products. However, we cannot digest the consequences of the continuous and rapid growth of raw material prices in the entire supply chain. Only increase the price of ink. And if downstream customers do not increase the price of their products, the entire market supply chain cannot operate in an orderly manner.

Clendenning, president of North American Sun Chemical Company: In recent years, despite the shortage of raw materials, Sun Chemical has been trying to reduce the cost of ink production. Sun Chemicals has used its market power and position as the world's largest manufacturer of printing inks and pigments to provide customers with a stable ink supply. Due to the increase in raw material prices and the scarcity of supply, Sun Chemical is looking for alternatives that can replace critical raw materials through research and development resources.

From this point of view, on the one hand, ink companies compensate for the increase in production costs through price increases. On the other hand, they also need to conduct comprehensive and reasonable research and design at the product design stage, and conduct comprehensive control over the production process of ink products in order to reduce ink as much as possible. The cost of making the ink market rationalized.

Although the price of ink continues to rise, its growth rate does not exceed the rate at which raw material prices increase. While the price of ink products has risen at the same time, the input costs for printing and packaging have also increased. Many printing companies can only earn meagre profits. At first, they resisted the rise in ink prices, but the continuous and rapid growth of raw material prices and many key issues. The shortage of raw materials has led most printing companies to accept ink prices.

In addition, with the increase in the price of ink, the quality and supply of the corresponding problems have continued to occur. Most ink suppliers are unable to shut down the production quality of good ink as they have before. This may be due to problems with the raw materials from which they produce ink.

The global ink market is growing slowly, with promising prospects in some areas

In 2005, some areas of the ink manufacturing industry continued to grow steadily. The biggest growth was in packaging printing inks. Among them, the development speed of UV flexo printing and functional inks is the fastest, which also makes the packaging market continue to show a stable development trend.

Despite the rapid development of functional pigments and coatings, UV inks, water-based flexo printing inks, and solvent-based inks in 2005, especially in stand-up pouches and sealable pouches, their development has not been as fast as expected. The development of a better label printing, shrink sleeve and aseptic packaging industry.

At the same time, as many small and medium-sized commercial presses gradually withdrew from the market and the volume of large-scale printing equipment continued to expand, it was expected that the continuous introduction of large-scale printing equipment could reactivate the shrinking sheet-fed and rotary printing markets, but it also caused Overcapacity. It is also believed that these sheetfed and rotary presses can use a combination printing process to provide high value-added printing services.

The entire ink market has grown slowly, but great progress has been made in digital printing technology, showing a strong growth trend. Flint Ink Company believes that the field of digital printing is rapidly expanding, and the packaging field is still the focus of attention as UV technology.

New products are emerging

In late 2004, the successful application of cold-set ArrowLith UV inks made the interstitial printing market gain high profits. UV ink curing technology won the PIA/GATF Inter Tech Technology Award in 2005. Wikoff Color has introduced new fluorescent inks for commercial UV lithography, commercial printing with high-performance lithographic inks, and more.

Sun Chemical introduced a variety of new ink types and production lines. For example, the PrintEasy line can print a variety of inks on a variety of special grades of paper. Sunchem Europe has introduced the SolarCat brand ink, which is the higher grade cationic UV flexo printing ink in the world, and it is at least twice as fast as other inks. AIC, a French thermochromic ink developer, is a subsidiary of Sun Chemicals. In mid-2005, it introduced a new type of thermochromic ink specifically designed for shrink film packaging and printing. Sunchem also has developed a solvent-based and oil-based jet ink for the super-large-format digital printing market based on a serious understanding of the printing industry, and it is called a "streamline" production line.

New developments in ink development In this issue, Sun Chemical's Inkjet subsidiary announced that it owns the first corrugated packaging digital printing business equipment, and also introduced a UV-curable white UV ink for inkjet printing.

Kohl & Madden introduced a free-radical ink for sheetfed printers. This is a major achievement. The ink does not contain volatile organics and it dries quickly, so that substrates can be die-cut and printed quickly. After processing, the final print can be delivered faster. At present, this ink is only available in North America.

In 2006, raw material prices are still the focus

Having witnessed the changes that took place in 2005, some people may ask what kind of situation it will be in 2006. Will there be a large ink company unite to stabilize the price of the ink market? Will there be more ink business mergers?

The answer is uncertain. But we can be sure that ink companies have to pay more, especially if raw material prices continue to increase.

One view is that the pressure faced by the ink market in 2006 will never be relieved. Although the cost of raw materials based on petroleum will be slightly reduced, the difficulties and pressures faced will never be reduced, so 2006 will be very difficult. One year.

Another view is that the pressure faced by the ink market in 2006 will be alleviated. As some of the major ink suppliers will put more effort into implementing the planned product price increase plan, their efforts may allow the ink industry to Earn more profit. In addition, the industry's difficulties will encourage ink companies to actively reform.

No matter what kind of predicament it faces, we still hope to see a more rational product price, which in addition to allowing ink suppliers to meet the growing needs of customers, can also better reflect the true price of raw materials and products.

In the face of this market pressure, we can see more ink company mergers. For example, after the successful acquisition of BASF's printing ink business, CVC has fully acquired Flint Ink, and the merger of the two companies will help strengthen the core competitiveness of these two companies in their respective fields. Currently, through the complementarity of products and sales systems, the two companies can perfectly combine business in North America and Europe. The merger of the two companies is a good thing for users, employees and shareholders. Also, Sun Chemical, one of the world's largest producers of printing inks and pigments, has acquired all of Rycoline's shares. According to Wes Lucas, chairman, president and chief executive officer of the Sun Chemical Company, the acquisition is part of the company's strategic plan to provide a "comprehensive solution" for the printing industry. If market pressures continue, we will see more mergers between small and medium ink companies in 2006.

There are too many “ifs” to predict the development of the ink industry. Of course, sustained economic growth is the main driving force for development. For the ink market, inflationary pressures and the supply of raw materials are the major challenges. Many industry analysts predict that the ink industry will experience slow growth in 2006, and ink company mergers will continue.

Clendenning summarized the development trend of the ink industry in 2006: “The ink industry will continue to develop in 2006. However, if the industry can't look far, but only hopes to completely offset the increase in raw material prices by increasing product prices, 2006 will It is a difficult year for development, and I really hope that the 2005 harvest and the merger between companies will help our industry develop better.I also believe that the merger between companies is not over, there will be more ink companies in 2006 merge."

Source of information: pack.cn