The global commodity markets are in disarray, and certainly as far as raw materials for the production of printing consumables, like fount solutions, washes and blankets are concerned, the outlook is volatile at best. In recent months many key base materials have increased in price, some by as much as 25% and although not all have seen such dramatic increases, the outlook for the next 6 months or so is that all these critical raw materials will see upward pressure.

“In terms of our Transfer Media; tensioned blankets, metal backed blankets and sleeves, the past 3 years have seen steady growth in our material costs” Explains Fredrik Broman, VP Product Management, Transfer Media, Flint Group, Print Media Europe. “Our forecasts predict this trend to continue and accelerate in 2011 due to demand for rubber polymers, solvents, fabrics and nickel all increasing, especially in Asia” he continues.

Butadiene, a key driver for rubber compounds used in the face material of printing blankets has seen dramatic increases since the beginning of 2009. Market prices today are almost 100% above pre-recession levels and downsizing of inventories has led to short availability adding to the pressure. Continuing demand at present levels will certainly maintain the current price structure.

“The fabric we use to make the carcasses for our tensioned blankets has also been on the increase for some time now” states Broman. “And although new cotton crops can relieve this pressure, climatic issues, especially in Pakistan as we all know about, have prevented this from happening. Prices for the blend fabrics we use are also well above pre-recession levels and the lower crop yields globally will result in substantial cost escalation through the rest of 2010 and well into 2011. Even synthetic fibres are rising with higher demand plus oil related pricing impacts”

Finally solvents used in the manufacture of Transfer Media have been driven up recently due to higher than expected market need and lower refinery and they too are now soaring above pre-recession levels, with prices expected to rise by another 7- 12% in 2011.

Nick Brannan, VP Product Management, Press Room Chemicals, Flint Group, Print Media Europe is concerned about the outlook for solvents too, as they impact on conventional blanket washes and fount solutions. “The shortage of refinery capacity needed to convert crude oil to petroleum distillates is our main cause for concern” he states, adding “We know that shipping volumes of many chemicals have recovered substantially from the 2009 lows, some by more than 30%, which contributes to pressure on pricing. The alcohol replacement solvents, ethylene and propylene based glycols and glycol ethers are also under pressure as production volumes are being minimized at a time when the market is recovering. However it’s not only solvents we need to be concerned about. Starch used in anti-set off powders could potentially be in global shortage due to poor wheat and potato crops in Eastern Europe in combination with significant increased demand. We are expecting price increases from our suppliers in excess of 25% in the short term.”

Gum Arabic used in fount solutions is under threat too, as prolonged rainfall in the producing areas will lead to just one round of tree tapping this season instead of two. “This will lead to short term supply issues and inevitable price increases once the tapping has been completed” concludes Brannan.

This scenario is in line with the general uplifts seen for all raw materials in the printing consumables sector, and shows no sign of abating in the short term. Flint Group remains committed to open dialogue with its customers and will continue to update them on a regular basis.

7 December 2010

For more information, contact:

Flint Group
Peter Baird
T +44 (0) 161 776 6865
peter.baird@flintgrp.com  

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