Raw material prices have been a major concern for ink manufacturers, and while costs have stabilized at a higher level, volatility can and does occur. In speaking with ink industry leaders for the upcoming Year in Review report, there remains much uncertainty heading into the coming year.
 
“Raw materials have been stable for most of the first three quarters in 2014, but again at higher price levels than a few years ago,” said Rick Clendenning, INX International Ink Co. president and CEO. “There also have been recent industry announcements concerning the rising costs of raw materials due to regulatory requirements that we are all dealing with now. The pigment area is a special concern.”
 
“While raw material markets had calmed in the second half of the year, recently, volatility has increased again. Falling oil prices have not begun to reflect in any significant manner in our commodities yet,” said Siegwerk CEO Herbert Forker. “Rather, ethylene and propylene, as our key feedstocks, are on a rise. Force majeure, environmental related shutdowns and restrictions continue to cause headaches.”
 
“Some raw materials are a big concern with only single sources now available,” John Copeland, president and COO of Toyo Ink America, noted. “Another concern is the political volatility of the world. There seems to be crisis after crisis nowadays and this creates uncertainty and fluctuations in cost and availability of raw materials.”
 
“Currently, the availability of most materials is good and there are only minor challenges for a few pigments and their raw materials,” added Robert Doerffel, corporate communications Europe for MHM Holding GmbH. “We hope this stability stays, but our experience over the past years tells us that ink raw material scenario is prone to sudden changes. The political instabilities in some areas of the world could influence raw material prices very quickly. We hope that this is not going to happen.”
 
“We have experienced sharp inflation in some resins, intermediates and solvents, but we have also experienced relative stability in a number of other key raw materials. In general, raw material prices have remained well above the levels that were in place as recently as three years ago,” said Ed Pruitt, chief procurement officer for Sun Chemical. “We have seen a number of raw materials under sharp cost pressure in 2014 that we’re keeping our eye on.
 
“Rosin resin is one, due to concerted efforts by the Chinese market to extract higher values for gum rosin,” Pruitt concluded. “We have also seen a dramatic rise in azo pigment intermediates costs due to operational issues as well as continued pressure on environmental compliance in China. The cost of ethyl acetate has also sharply escalated this year due to supply tightness in the European market. Undoubtedly there will be some unexpected pressures that emerge due to supply issues we are not aware of today. However, key raw materials are in generally good supply, global growth continues to be at a modest pace, and new oil production should help keep the oil and feedstock costs in line.”