In May 2018, word began to spread about a shortage of key photoinitiators for inks and coatings. On May 4, the European Printing Ink Association (EuPIA) warned of a “potential shortage of photoinitiators,” and during RadTech 2018, held a few days later, ink companies discussed then problems they were seeing, which we reported in a blog and video.
 
In particular, TPO and TPO-L, important photoinitiators for inkjet inks, UV LED inks, automotive coatings, and wood coatings and flooring, are in short supply due to the shutdown of a key precursor produced by the Chinese government.
 
There are only a handful of companies that produce this precursor. Material is scarce, leading to manufacturing challenges. Prices have risen dramatically for what remains in the market, and efforts to reformulate ink formulas aren’t simple.
 
There are a number of causes here, including China’s Blue Sky initiative to improve the environment, REACH legislation leading to companies leaving the market, factory fires and force majeure situations. Now, a month and a half later, ink company executives are providing an update on the shortages and resulting price increases.
 
Anatomy of a Shortage
So what caused the shortage of the precursor that is critical to certain photoinitiators? One driver is China’s government enforcing its environmental laws. As a result, factories making the precursor for many photoinitiators have been shut down as a result of the Blue Sky initiative.
 
“Among other challenges, a major Chinese manufacturer of a photoinitiator intermediate was shut down by the government in order for environmental inspections to be conducted in the industrial zone where that company was located,” Michael Podd, chief procurement officer for Flint Group, said. “This compounded the already-existing supply tightness caused by China’s Blue Sky initiative.

“The situation is very dynamic,” Podd added. “The Blue Sky initiative has been the major contributor to this problem, but there are additional challenges as well. For example, some photoinitiators are being reclassified by REACH/CLP in Europe, and the identified alternatives are considerably higher-cost raw materials. We are watching closely to assess whether or not this European reclassification will affect usage in North American formulations and/or affect raw material suppliers’ inventory or pricing in this region.” 
 
“Governmental initiatives and regulations geared toward environmental protection have caused many suppliers of photoinitiators to either cease or reduce production for limited periods of time,” said Jeffrey Shaw, chief supply chain, quality, and business improvement officer, Sun Chemical. “Additionally, as outlined by the European Printing Ink Association, photoinitiator supply has also been impacted by major incidents, including a factory fire, unforeseeable events, low stocks, unplanned maintenance, and production outages.”
 
Carsten Zoelzer, hubergroup’s director of product management for sheetfed inks and energy curing inks, said a confluence of events triggered the photoinitiator shortage.
 
“A shutdown of a major PI precursor supplier by the Chinese government broadly contributed to the particular issue,” Zoelzer added. “But it was also force majeure and other unforeseeable production outages that added on top.”
 
Everyone agrees that the Blue Sky program is needed, as China’s air and water quality has suffered.
 
“Many producers of base chemical material are located in China and are affected by governmental initiatives for environmental protection,” Zoelzer pointed out. “As mentioned in the EuPIA statement, such initiatives are to be welcomed, but they have an impact on availability and price of materials.”
 
Impact on Ink Manufacturers
The impact of the photoinitiator shortage has been two-fold. Not only is there not enough material to go around, but prices are on the rise for any material that is available. This has led companies to take numerous approaches to meet their customers’ needs. One ink manufacturer noted that it has been difficult to plan production.
 
“It has been difficult to capture growth opportunities,” they added. “Sourcing of identical raw materials from a different producer is not an option since the feedstock/precursor is in short supply to make photoinitiators. Selecting and qualifying alternate photoinitiators is not always possible unless alternates are prequalified.”
 
“Formulations requiring these unique raw materials are complex and there are limited alternates available,” said Shaw. “In some cases, they are under patent and single sourced.”
 
Podd noted that Flint Group has enough supply of UV materials for customers’ current needs and the company is prepared to work with proven acceptable alternatives, should that be necessary.
 
“Those raw material alternatives, however, are more costly,” added Podd. “With our customers’ business needs in mind, we will do everything we can to continue providing an uninterrupted supply of the current UV formulations in North America.”
 
“I think it’s safe to say everyone who uses the materials have been impacted globally,” said Jonathan Graunke, VP energy curable technology, research & development for INX International Ink Co. “Through a great deal of global coordination, we are managing our needs through strategic sources, technical cooperation, and participation from our sales team.”
 
“For those cases where alternatives are available, we have been able to manage the situation so far,” said Zoelzer.
 
One ink producer noted that customers aren’t happy, but they are trying different approaches to curing.

“More and more accounts are switching to the LED process and we will need more raw materials to be manufactured consistently and without interruptions,” they reported. “Some are using mercury vapor lamps so they are using conventional UV coating. We all hope this will play out and the products will recover. Gloss is the main factor as is the speed of curing, and some companies see a major difference. Some companies are cutting back on the number of materials and curing is much slower.”

Prices on the Rise
Prices for key ingredients for energy curable inks and coatings have been increasing since the first quarter of 2018. As the shortage continues, the supply of raw materials is becoming scarcer while demand rises. This has led to higher costs for ink companies; Sun Chemical announced price increases for all ultraviolet (UV) and electron beam (EB) inks in Europe by 4% to 6%, effective July 1, 2018.
 
“Prices for these materials have escalated significantly,” Shaw observed. “There have been immediate, double-digit increases implemented and excessive expedited freight costs.
 
“First and foremost, the market is concerned about uninterrupted supply,” Shaw added. “Our primary objective is to maintain commercial activity. Increasing prices on our inks is a challenge as costs are difficult to pass through the supply chain.”
 
Other ink industry executives reported similar price increases. “With shortages, material increase naturally follows,” Graunke said.
 
“We have experienced significant cost increases on photoinitiator-related raw materials,” Podd reported.
 
“Ink makers are getting price increases on almost all raw materials and printers are not ready to accept the increases,” one ink maker reported.