Rising cost of raw material rosin will lead to global ink prices

As an important raw material for thermosetting, gravure printing, coldset, and sheetfed printing inks, the price of rosin has grown by an unprecedented amount over the past year. Its latest price increase will cause another sharp shake in the European market later in 2010.

It is understood that rosin imported from China will take about 60 days to reach Europe, so it will affect the cost of phenolic resin (ink material) in the fourth quarter of 2010 and the first quarter of 2011.

According to ink giant Flint Group, although crops in China have been reduced due to weather conditions, they will not affect the supply of inks. The price increase is purely affected by market demand, and the current price of rosin has reached the highest point in the past 20 years.

Jan Paulvander Velde, Senior Vice President of Purchasing at Flint Group explained: “We have encountered many difficulties related to the purchase and pricing of rosin.”

This market is very turbulent, but its current status is relatively stable compared to the past decade. According to Jan PaulvanderVelde, the price of rosin has also reached a peak value higher than the current price of $2,500/ton in the past 30 years.

However, in the past 10 years, the market price of rosin has basically stabilized at the level of about 800 US dollars / ton, only in 2004 there has been a small peak. The current price of rosin is indeed high, but it also indicates that a new market is about to take shape.

For buyers, it may be difficult to find a balance between grasping the timing of purchases and ensuring the supply of raw materials. Wang Peow Tan, vice president of purchasing operations for Asia in the Flint Group, said: “The first time Rosin began to increase prices in 2009, the speed was very slow and the recent growth rate was noticeably accelerated.”

He said: "Although we have a certain foundation in China and we know more about the market, no one can think of such unjustified explosive growth in the price of rosin."

Although users outside the printing market, such as adhesives manufacturers, have more flexible material choices, they do not need to choose rosin, but the market price is still running at a high level.

From the current point of view, the market has reached a new balance, and the price of rosin recovered to its previous level in the short term, and in particular its bottom line price of 10,000 yuan/ton has not been broken.

In fact, even if the price of rosin looses, it will soon rise again, and even if you are willing to pay a big price to buy, there must be enough material supply.

Nick Brannan, vice president of print media product management at Flint Group Europe, said: "Phenol resin is an important factor in the price of printing inks."

Earlier in 2010, in response to the first-round rise in raw material costs, the Flint Group had raised the price of its products, but the company said that before the price of rosin rose, it was temporary, but it was temporary for the majority of users. It said that the short-term increase in the price of ink is also acceptable.

But this time it seems different from before, the price of rosin continues to rise, and the market's robustness has reached a new level, so this will inevitably affect the future trend of ink products. Ink manufacturing companies should always pay attention to changes in prices of raw materials, timely procurement, and minimize production costs.