Many customers have complained to us that thermal paper roll prices increase almost every week. When they order the paper rolls, they have to pay a higher price than before, and sometimes the delivery period is longer as well. What happened to the thermal paper market? Will this situation continue in 2018, or get better? What should customers do in this complex market environment? In this article, we will explain and give you some answers.
Thermal Paper Price Increases by 50% in 2017
One substance required for the production of thermal paper is leuco dye. Connect Wilson (Penglai) Chemie Co. Ltd, in Yantai, China, is a primary supplier of leuco dye for 80% of the world’s thermal paper mills. In July 2017, Connect Wilson was shut down by the Chinese Ministry of Environmental Protection due to an environmental issue, and as of Jan 2018, the government still hasn’t allowed them to resume production of the leuco dye. Without leuco dye, there can be no thermal paper.
As a result, this shortage has rippled through all thermal paper mills worldwide. For example, South Korea’s Hansol will be shut down. Other companies affected include Chenming & Guanhao of China, Oji of Japan, Koehler & Mitsubishi of Germany, Torras of Spain, and Kanzaki of the United States. These are all major worldwide mills of bulk thermal paper.
As these major paper mills have slowed and in some cases stopped production of thermal paper, a worldwide shortage has resulted. As anticipated, global prices on thermal paper products have risen rapidly, and the order delivery time has been grown longer. Take an example, for one 20 foot container of 80mm x 80mm thermal paper rolls, the price was only $0.535/roll in July 2017, and it only took 10 days to complete the order. Now, in Jan 2018, the price is $0.630/roll, and it takes us at least 25 days to complete, while we wait for thermal paper materials to arrive.
From the chart above, we can see the thermal paper price was only $1150/ton in July 2017, and the prices kept increasing after that. Now the latest price is $1850/ton in Jan 2018, a nearly 60% increase!
What Can We Do in this Situation?
1. Keep calm and stay cool.
Since we cannot change the thermal paper market situation, we have no choice but adapt to it. Appvion, the largest thermal paper mill in the USA, announced another price increase on their economy grade POS thermal paper on Jan 15th, 2018, an increase of 9% just in the past two weeks, and a 29% increase since last July. Other thermal paper mills around the globe have announced similar increases.
The thermal paper shortage and high prices are occurring all over the world; you are not the only one who is facing this situation, so keep calm and stay cool.
2. Communication Matters.
As a dealer, if you are importing the rolls from China to resell, it is important for you to understand this situation so you can plan and budget accordingly. The long-term outlook still remains cautious, and more increases are coming. Communicate frequently with your suppliers about the updated price, and convey the newest price to your customers. In the meantime, try to prepare as much stock as you can, to ease your customers’ shortage problem.
3. Wait and Pray.
The Connect Wilson (Penglai) company will remain closed until the government allows them to reopen the factory, and there are no other leuco dye producers to replace them. Thus, the thermal paper shortage is very real and could last until mid-2018. Until the prices come down, about all we can do is wait and pray for the company to reopen soon. Without the leuco dye, there is no thermal paper.