Resins are a key ingredient for inks, and suppliers report there are opportunities ahead for resin production.
Resins are a critical component for printing inks, providing many of the key characteristics – abrasion resistance, gloss and waterproofing, to name but a few – that the finished ink requires. They are made up of different materials, most notably hydrocarbons for paste inks, modified rosins, nitrocellulose, acrylics, polyurethanes and polyamides.
Resins are also a sizable market: according to consultants MarketsandMarkets.com in its report, “Ink Resins Market by Type, by Technology, by Application – Global Forecasts to 2019,” the market is growing at a CAGR of 4.78% between 2014 and 2019. The report estimates the ink resin market at $2.64 billion in 2013, rising to $3.46 billion in 2019, driven by growth in packaging. In addition, MarketsandMarkets.com sees the Asia-Pacific region as the fastest growing segment of the ink resins market, largely due to its high economic growth rate.
The ink industry had a relatively solid year in 2014, particularly in PACKAGING and INKJET, and leading resin manufacturers said that the past year has been good for their industry as well.
Rich Bradley, global market segment manager, print and packaging for Lubrizol Advanced Materials, reported that the resin industry tracked well with the overall economy in 2014. “With Lubrizol’s strength in aqueous systems, we benefitted from the continuing shift away from traditional solvent-based resins,” Bradley said. “Lubrizol specializes in narrower segments of the industry and we saw an overall positive recovery in 2014. Higher value application areas for our acrylic resin technology, like hot stamp foil and vacuum metallization, continue to show strong recovery.” As for growth, Bradley said that digital inks are growing the fastest on a percentage basis, but the packaging ink segment is expanding fastest on an absolute volume basis. “Packaging continues to be one of the most dynamic end use markets for conventional printing,” he added.
Terry Chomniak, director of sales – process organics for Hydrite Chemical, said the resin market has been on the upswing during the past year. “Hydrite has seen gradual improvement over 2013 and 2014 in the resin industry, and we feel it is sustainable moving forward,” Chomniak said. Chomniak noted that Hydrite has seen stability in the packaging ink area, and the OPV market also continues to expand. “Hydrite continues to see growth in the paper, paperboard as well as the corrugated packaging markets,” he added. To meet this need, the company developed HydriPrint 382, a low viscosity, ultra fast drying non-film-forming emulsion designed for high speed flexo and gravure printing of paper and paperboard.
Arthur Lersch Jr., president of ALVAR, Inc. and ALREZ, Inc., said that he is seeing shifts continued toward consolidation, and he added that the present state of the ink industry is essentially the new normal. “There is not so much a recovery as a new ‘norm,’” Lersch said. “The changes will continue on the path they are on…downward.” He noted that the packaging ink market is still the strongest for resin suppliers.
“The 2015 ink market is better than last year,” a Yuen Liang Industrial Co., Ltd. official said. “Due to shale gas drilling, raw material and chemical prices were chaotic in the past few months. The price has already rebounded after reaching the bottom. Both demand and price are steadily continuing upward now.” The executive added that packaging ink remains the strongest market.
“Specialty Polymers enjoyed a record sales year in 2014,” said Brad McPhee, Specialty Polymer’s VP of sales and marketing. “We saw continued recovery in most of the markets we sell to, including an increase in our international business. We continue to see demand for performance improvements and technical solutions to help our customers differentiate and achieve sustainable, profitable growth.”
Matt Grodd of Kane International said that flexible film for packaging is the ink market that has seen the most growth over the past few years. “The resin industry seemed to be up overall across the various market segments within the solvent-borne graphic arts market,” added Grodd “For the most part, we’ve seen a steady growth in polyurethane resins used in inks for flexible packaging. As flexographic packaging ink continues to grow, the hopes for resin companies is that the utility for resins (such as polyurethane resins) will also continue to grow.”
“Overall volumes to the segments of the ink industry that we serve were slightly down for the year,” said Matt Weston of Resinall Corporation. “Resinall mainly services the lithographic segment of the ink industry. This segment did decrease in volume for us in 2014, but at a slower rate than recent years. Margins on the products sold continue to be very tight.”
Scott Auger, global marketing manager at Allnex, reported that the overall resin industry stayed slightly ahead of GDP in most regions, although more suppliers have entered the market and raw materials have had some dramatic fluctuations. “Traditional heatset and coldset web offset inks are facing challenges, but radcure ink products are holding up,” Auger said. “Being boosted by point of display and niche markets, screen inks have stabilized.” Auger noted that the proposed RockTenn-Mead Westvaco and Ball-Rexam mergers will impact the resin and ink markets should they be approved. “We saw that some major consumer packaging mergers will form the second- and third-largest packaging companies in the world, which creates resin purchasing power in a growth sector,” Auger added.
Raw Materials for Resins
The declining price of crude oil has drawn much attention in terms of costs for inks, and some resin manufacturers report that these reduced costs are helping stabilize their own supply chain. However, petrochemicals are not the only feedstock for packaging ink resins, and ink manufacturers are not the primary end users for some of these feedstocks.
“Petroleum prices have helped stabilize any upward pressure and even some reduced pricing,” Lersch said. “The volatility of the raw material market that the industry has seen over the past several years seems to have stabilized,” Chomniak reported. “Hydrite has seen an improvement in raw material pricing and is acting accordingly.”
“While the fluctuation of oil pricing is causing some uncertainty and price fluctuation in the overall raw material market, feedstocks for many of our raw materials are used in a variety of chemistries, making some more dependent on demand than the normal landscape of petro chemicals,” Bradley observed.
Regulations and the Resin Industry
With the increase in regulatory mandates, ink manufacturers are asking more of their suppliers, including resin companies, who are also negotiating through their own set of concerns.
“There is concern in the industry regarding regulatory issues,” Bradley noted. “This, coupled with businesses taking a global view of their markets, may have led some suppliers to spend a lot of time, effort and resourcing to meet customer demand for support in this area. The move to SDSs (Global Harmonized System) has dramatically increased demand on vendors for support.” Bradley said that one of the greatest challenges facing the resin industry is helping customers understand the impact of changes in the regulatory landscape. ”This will be especially true as more mid-sized businesses try to become global without the regulatory resourcing to support this move,” Bradley added.
In terms of regulations, Lersch said that new GHS legislation and continued pressure for low migration systems are having an impact. He also noted that more phenol-free systems are being introduced. He added that ALREZ has added several new phenol-free system, a full line of ink alkyd and some solvent esters.
“These regulations increase our manufacturing cost, but we take the regulatory issues seriously and react positively,” Yuen Liang reported. “We are devoted to advancing our technology to provide our customers the best product.”
“Hydrite continues to respond in a timely manner to our customer’s regulatory requests,” Chomniak said.“Hydrite also continues to review our raw materials to ensure that they are meeting or exceeding regulatory requirements. Just recently, Hydrite switched to a glycol-free resin with the goal of helping our customers reduce their VOCs.” He added that Hydrite continues to work closely with key raw material suppliers to enhance performance properties and improve regulatory compliance of the company’s existing emulsion portfolio.
Expectations for the Coming Year
Overall, resin suppliers see some opportunities ahead for the next 12 months.
“We are experts in sourcing good quality raw materials, and as a result, we can offer customers a stable source of supply,” Yuen Liang’s official said. “Therefore, with this advantage, we expect to pick up more market share.”
Lersch said that he expects the resin market to be “stable” for the next year. He added that consolidation, capacity and raw material supply remain the most significant challenges, in order, for resin manufacturers going forward.
“Commercially, Hydrite is working to develop new chemistry for unique applications that should launch later in the year, specifically green technology that has been requested by the market,” Chomniak said. “We expect some uncertainty in the economy with fluctuating oil prices leading the way,” Bradley concluded. “We are looking forward to a positive year in 2015.”