Anthony Locicero, ASSOCIATE EDITOR11.12.19
According to the Pew Research Center, last year, US newspaper circulation reached its lowest level since 1940. The industry’s financial fortunes and subscriber base have been declining since the mid-2000s, and website audience traffic, after some years of growth, has leveled off, according to Pew Research Center.
The estimated total US daily newspaper circulation (print and digital combined) in 2018 was 28.6 million for weekday and 30.8 million for Sunday, down 8% and 9%, respectively, from the previous year, Pew Research Center reported.
The decline continues to affect the publication printing and ink fields.
“With this change, ink usage also declines with the market,” said Chris Parrilli, president, North American Inks, Sun Chemical. “Where you see any growth is in the sites that now have become the regional printer for an area, handling many different publications from other sites.”
“The publication printing market is further shrinking as anticipated and there are no significant changes to be expected going forward,” added Joern Bartelheimer, VP publication gravure, EMEA, Siegwerk. “The surprising closures of big printing houses led to an even stronger decline during 2019 than seen in the last few years. Continuing shortages and price increases in paper have also adversely affected the market in 2019.”
Are there opportunities for growth in the catalog and/or magazine segments?
“Some special interest magazines with high-quality journalism and less price-sensitive consumers are still demanding high-quality printing inks, but those magazines are generally just issued in limited editions with only limited impact on the total publication printing market,” Bartelheimer said.
Parrilli said the heatset market has continued to achieve stable levels over the past two years.
“Despite the mid-single digit decline we forecasted for this market, we have not experienced that contraction,” he said. “Similar to last year, regionally focused printers have shown significant increases in volume and growth.”
Raw materials also remain a serious concern.
“Manufacturers should anticipate feedstock cost and supply disruptions that may impact raw materials for publication inks this year,” said Jeff Shaw, chief supply chain officer, Sun Chemical. “Due to increased geopolitical tensions, crude oil has increased over 60%, in turn raising costs of raw materials including distillates, ink oils, and carbon black.
“The environmental assessment legislation in China that has impacted pigment intermediates and finished pigments has not yet subsided, creating continued pressure through causing supply disruptions and volatile price increases,” Shaw continued. “Also, the implementation of trade tariffs has impacted 2019 costs and will escalate further in January 2020.”
In March 2019, a deadly explosion occurred at Jiangsu Tianjiayi Chemical in China and severely impacted the global raw material supply chain, including materials used in publication and UV printing inks, Flint Group said in a press release.
The explosion spread to adjacent facilities, causing nearly 80 deaths, injuring hundreds of people and forcing thousands of evacuations of nearby areas, the release states.
The Chinese government forced shutdowns at the industrial park, as well as others nearby, to allow for investigations and safety inspections, per the press release.
“For publication inks, it’s just a very small number of raw materials that need to be monitored in terms of availability and price development,” Bartelheimer said. “Most important are pigments and the development of resins in this context. Due to new environmental restrictions and stricter regulations, prices continued to increase during 2019.
“Carbon black prices have risen linked to higher intermediate prices and limited availability,” he continued. “With the MARPOL legislation a switch to cleaner fuel-oil to reduce sulfur oxide emissions will for example further drive significant price increases in carbon blacks and freight costs going forward. Thus, increasing prices and occasional limited availability will remain a topic for 2020 while not only affecting publication gravure but also a wide range of other ink industries.
“So far, we don’t expect a significant relief in availability and price level in the near term,” Bartelheimer added. “At Siegwerk, it is always our objective to minimize the risk to our customers due to potential supply shortages by having sufficient alternative suppliers and materials for the manufacture of our products and solutions.”
On the consolidation side, Quad Graphics and LSC mutually agreed to terminate their merger agreement pursuant to which Quad would have acquired LSC.
The all-stock transaction was announced on Oct. 31, 2018, and was approved by shareholders of both companies on Feb. 22, 2019. In June, the US Department of Justice sued to block the acquisition.
“With the overcapacity of printing equipment, you will most likely continue to see consolidation by companies of their own print sites and more consolidation with regional acquisitions by other printers,” Parrilli said.
The estimated total US daily newspaper circulation (print and digital combined) in 2018 was 28.6 million for weekday and 30.8 million for Sunday, down 8% and 9%, respectively, from the previous year, Pew Research Center reported.
The decline continues to affect the publication printing and ink fields.
“With this change, ink usage also declines with the market,” said Chris Parrilli, president, North American Inks, Sun Chemical. “Where you see any growth is in the sites that now have become the regional printer for an area, handling many different publications from other sites.”
“The publication printing market is further shrinking as anticipated and there are no significant changes to be expected going forward,” added Joern Bartelheimer, VP publication gravure, EMEA, Siegwerk. “The surprising closures of big printing houses led to an even stronger decline during 2019 than seen in the last few years. Continuing shortages and price increases in paper have also adversely affected the market in 2019.”
Are there opportunities for growth in the catalog and/or magazine segments?
“Some special interest magazines with high-quality journalism and less price-sensitive consumers are still demanding high-quality printing inks, but those magazines are generally just issued in limited editions with only limited impact on the total publication printing market,” Bartelheimer said.
Parrilli said the heatset market has continued to achieve stable levels over the past two years.
“Despite the mid-single digit decline we forecasted for this market, we have not experienced that contraction,” he said. “Similar to last year, regionally focused printers have shown significant increases in volume and growth.”
Raw materials also remain a serious concern.
“Manufacturers should anticipate feedstock cost and supply disruptions that may impact raw materials for publication inks this year,” said Jeff Shaw, chief supply chain officer, Sun Chemical. “Due to increased geopolitical tensions, crude oil has increased over 60%, in turn raising costs of raw materials including distillates, ink oils, and carbon black.
“The environmental assessment legislation in China that has impacted pigment intermediates and finished pigments has not yet subsided, creating continued pressure through causing supply disruptions and volatile price increases,” Shaw continued. “Also, the implementation of trade tariffs has impacted 2019 costs and will escalate further in January 2020.”
In March 2019, a deadly explosion occurred at Jiangsu Tianjiayi Chemical in China and severely impacted the global raw material supply chain, including materials used in publication and UV printing inks, Flint Group said in a press release.
The explosion spread to adjacent facilities, causing nearly 80 deaths, injuring hundreds of people and forcing thousands of evacuations of nearby areas, the release states.
The Chinese government forced shutdowns at the industrial park, as well as others nearby, to allow for investigations and safety inspections, per the press release.
“For publication inks, it’s just a very small number of raw materials that need to be monitored in terms of availability and price development,” Bartelheimer said. “Most important are pigments and the development of resins in this context. Due to new environmental restrictions and stricter regulations, prices continued to increase during 2019.
“Carbon black prices have risen linked to higher intermediate prices and limited availability,” he continued. “With the MARPOL legislation a switch to cleaner fuel-oil to reduce sulfur oxide emissions will for example further drive significant price increases in carbon blacks and freight costs going forward. Thus, increasing prices and occasional limited availability will remain a topic for 2020 while not only affecting publication gravure but also a wide range of other ink industries.
“So far, we don’t expect a significant relief in availability and price level in the near term,” Bartelheimer added. “At Siegwerk, it is always our objective to minimize the risk to our customers due to potential supply shortages by having sufficient alternative suppliers and materials for the manufacture of our products and solutions.”
On the consolidation side, Quad Graphics and LSC mutually agreed to terminate their merger agreement pursuant to which Quad would have acquired LSC.
The all-stock transaction was announced on Oct. 31, 2018, and was approved by shareholders of both companies on Feb. 22, 2019. In June, the US Department of Justice sued to block the acquisition.
“With the overcapacity of printing equipment, you will most likely continue to see consolidation by companies of their own print sites and more consolidation with regional acquisitions by other printers,” Parrilli said.