Demand for Ink Increases Rapidly   
By Song Guanqin

The rapid output growth in printed papers has promoted the demand growth for printing ink.

Output increased steadily

China's ink sector has developed rapidly in recent years. According to the National Bureau of Statistics of China, China's ink output was 347.9 thousand tons in 2006, an increase of 15.1% over 2005. China is the fourth largest ink producer in the world surpassed only by the United States, Japan and Germany. The output of ink amounted to 249.3 thousand tons in the first eight months of 2007, a rise of 10.52% over the same period of 2006, and is expected to reach around 390 thousand tons in the whole year of 2007.
   China has more than 400 ink producers. There were nine companies with annual output over 10 thousand tons in 2006, and the total output of Tianjin Toyo Ink Co., Ltd., Hanghua Ink Chemical Co., Ltd. and Taiyuan Coates Lerilleux Ink Chemical Co., Ltd. accounted for 18.3% of the total.

Export rose rapidly

Despite the rapid development there is still a supply deficit in the domestic ink market, especially for high grade products, and importation of ink therefore has continually increased. China's import of printing ink amounted to 47.8 thousand tons in 2006, with an increase of 1.1% over 2005, and the average import price reached US$8 357 per ton, a rise of 5.5%.
   With the rapid development of printing technologies, China has upgraded its ink considerably in quantity, variety and quality, and in addition to satisfying the domestic demand, some inks have been exported. China's exports of printing ink reached 33.2 thousand tons, an increase of 39.5%, and the average export price was US$4 353 per ton, basically equal to that in 2005. The export price was much lower than the import price because most exports were products with medium or low grade.

Consumption increase promoted by paper printing sector

China's average annual consumption growth of ink was 16.9% during the Tenth Five-year Plan period (2001-2005), and the apparent consumption of ink reached 365.9 thousand tons in 2006. With the sustained development of China's economy, the demand for ink will increase constantly, and the demand growth is expected to be over 10% in 2007. Paper printing is a traditional sector for ink consumption in China, and has developed rapidly in recent years. China's output of machine-made paper and paperboard amounted to 68.04 million tons in 2006, an increase of 20.0%, among which the output was 4.01 million tons for newspaper, 2.64 million tons for writing and printing paper, an increase of 17.7% and 34.4% respectively. The rapid output growth in printed papers has promoted the demand growth for printing ink.
   China's industry and agriculture has developed rapidly, and the production and demand of plastic packaging has therefore increased rapidly. Most of the packaging materials need to be printed and the demand for ink was greatly promoted. The printing of soft package with plastic films as main products hold an important position in package printing, and the output and consumption of plastic films has increased considerably in recent years. China's output of plastic films reached 5.29 million tons in 2006, a rise of 8.3%, and the output growth is expected to be 8% in the next few years.

Table1 Major Ink Producers in China in 2006    
Producer                                      Output   Growth over
                                              (thousand t)    2005(%)
Tianjin Toyo Ink Co.                         27.3    11.5
Hanghua Ink Chemical Co.                     21.9    20.7
Taiyuan Coates Lerilleux Ink Chemical Co.    14.6    0.9
Zhejiang Yongzai Chemical Co.                13.0    8.6
Shenzhen-DIC Co.                              12.4    12.2
Shanghai Peony Printing Ink Co.              11.5    8.1
Shanghai DIC Ink Co.                        10.6    10.2
Yip's Ink & Chemicals (Zhongshan) Limited    10.3    2.9
Shenzhen Coates Lerilleux Ink Chemical Co.    10.2    8.4
Yip's Ink & Chemicals (Shanghai) Limited    9.8       48.6
Shanghai Si-Lian Industrial General Co.       7.8       11.7
Coates Brother (Guangzhou) Ltd.              7.7       42.0
Source: CNCIC

Table 2 Import Source and Export Destination
of Printing Inks in 2006
Destination/Source    Import    CIF price    Export    FOB price
                     (t)        (US$/t)        (t)       (US$/t)
Asia                 39 125.2    8 140    28 138.4    4 216
Africa                 4.0          12 326    1 892.9       2 541
Europe                5 835.2       8 825    1 606.3      5 319
South America        125.2        4 437    607.5       4 354
North America       1 999.5       13 519    818.2       10 671
Pacific               715.9        2 666    116.7       8 994
World total          47 805.0    8 357    33 180.0    4 353
Source: CN