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Season for price hikes

November 28, 2005

Season for price hikes
well under way
Take a generous pinch of weak economic conditions, throw in the global aftermath of natural disasters, and mix together with some serious supply problems with oil based raw materials. The result is a predictable hike in prices. European examples include the likes of Rohm & Haas, which makes the ingredients for all types of adhesives and coatings. It blames the prices it pays for its own raw materials and petrochemical products, as well as energy and freight related costs. It does not see any lessening of their effects until well into 2006. Stora Enso Speciality Papers has said its European customers will pay an extra 5 percent for all wet strength label papers and flexible packaging papers delivered from January 1, 2006. Adapack, a producer of coated one-side papers for labels and flexible packaging, blames soaring manufacturing costs for price increases equivalent to $72 to $133 per ton for all its paper grades.
Film manufacturers are particularly affected by a shortage of refined petroleum and higher costs. Its byproducts include ethylene, propylene and styrene monomers that are used to produce commodity plastic resins. Recent polyethylene price increases are now filtering through the supply chain.
Moira McMillan, CEO of the British Coatings Federation, specifically warns that the labeling and packaging markets should expect further rises in printing ink prices. A major factor has been the doubling of the cost of crude oil compared to a year ago, although the problem of reduced refining capacity in the USA seems to have eased slightly.
“Ink manufacturers have been holding prices while current stocks last, but in a very difficult market they cannot absorb cost increases of this magnitude for any significant length of time,” she says. The hike in ink prices in the USA and Canada across the various commercial and packaging ink sectors has not gone unnoticed.