Date: May 7, 2021
To: To Whom It May Concern
From: Ken Klug, Director of Purchasing
Subject: Raw Material Update (Customer Update)
The delivery of energy-cure raw materials continues to be very challenging. The end of Force Majeure for our many suppliers was anticipated to occur in May. Lack of raw materials has forced suppliers to remain on Force Majeure. The limited suppliers that have come out of Force Majeure remain on tight sales allocation, making it very difficult to get materials on time or at all. The importing of materials from overseas was anticipated to stabilize but instead remains very difficult. Freight costs have skyrocketed due to container availability, ongoing port congestion, lack of chassis, drivers, and increased demand for air freight. Lead-time for containers has nearly doubled due to the continued congestion. Some suppliers have utilized air freight deliveries due to multiple containers being delayed in transit.
Multiple chemical manufacturers are still impacted by the results of February’s winter storms in Texas. Energy cure feedstocks were the primary concern but as the weeks have progressed the remaining chemistries have also been impacted. Material shortages continue to plague the entire graphic arts industry. Demand remains high while supply chains try to stay “above water,” as they struggle to secure all the materials necessary to make their products. The Texas plants that are operating continue working through a backlog of orders. Suppliers are doing everything they can to fulfill orders as fast as possible, but we are likely looking at late Q2 or early Q3 until most come out of Force Majeure.
Costs also continue to increase due to the lack of supply, packaging, and the increased demand; especially for Acrylic and Epoxy feedstocks. Agriculture oils have encountered record cost increases over the past month which has impacted the offset inks and coatings. Wikoff Color was hoping to see our cost plateau but unfortunately, costs and lead-times continue to accelerate higher. The ink industry continues competing with other industries, such as construction, metal coatings, plastics, electrical components, and adhesives, which makes it hard to get the chemicals that we need to produce inks.
We’ll continue keeping you informed as supply issues are brought to our attention.
Director of Purchasing
Letter provided by Wikoff Color Corporation