Solving: Direct Thermal Label Products Taking A Hard Hit
Do you have a plan for your direct thermal label products? The direct thermal paper industry has been a relatively stable and a growing over the past 5 years. We are seeing more new applications in the mobile market than ever before. There were two major announcements over the past couple of weeks. The first, one of the largest providers of direct thermal receipt paper just filed bankruptcy. Second, it was announced earlier this month that one of the world’s largest suppliers of Leuco dyes, an essential ingredient of thermal paper, has been temporarily closed by the Chinese government for “environmental reasons”, and is expected to remain closed for at least three months.
As a result of this plant closure, there is expected to be a worldwide thermal paper shortage that could last until mid-2018. The biggest impact of this will be felt in the receipt paper market, and most thermal paper mills have already put their converter customers on allocation for their lightweight 2.1 and 2.3 mil “economy grades”. As we have multiple suppliers for these grades, coupled with the fact that this is not a major part of our business, we do not expect these allocations to impact our ability to service those of our customers who buy these products.
This dye shortage will, however, result in price instability for all thermal paper grades for the foreseeable future. In fact, this past Friday we received notification of a 9% increase in the 2.1 and 2.3 mil grades and a 6% increase on all other grades. At present, these increases only relate to receipt, tag, and ticket grades. As of today, we have not received any increase announcements from our Direct Thermal label suppliers, though these will likely be forthcoming at any time. It is also very likely that we could see multiple direct thermal media price increases over the course of the next several months.
With our demand at this point, PaladinID will be ok with the materials on hand. Our vendors have secured materials for our consumption as we are one of the largest suppliers of receipt paper to the market. We will work with you to forecast and setup blanket orders so there will be no disruption in your business. We have time now to plan and put a strategy in place for you. Give us a call 888.972.5234 or send us an Email, we are here to help keep your business running smoothly.
It will be interesting to see what new ideas and innovation comes of this news.
PaladinID’s commitment to saving you time and money, while ensuring your product labels maintain the highest level of quality, accuracy, and consistency, is what differentiates us from the competition. PaladinID has created and supported high-performance labeling solutions in many diverse fields all over the world. If you have any questions or need additional information,
please email or give us a call at 888.972.5234 we are here to help.