Connect Chemicals, the world’s primary supplier of leuco dye (required in the production of thermal paper), has shut down its main manufacturing facility due to environmental issues. According to Brian Gale of I.D. Images, a leading pressure sensitive label converter outside of Cleveland, “It is estimated that Connect Chemicals supplied approximately 70% of the leuco dye, a key component in DT [direct thermal] paper production for Europe and Asia.”. Global consolidation has led to one or two suppliers having a dominant share of the market which is having a major disruptive impact. As a result of Connect Chemicals being closed for several months to resolve their environmental issues, we are seeing price increases totaling between 10-15% since mid-October.
According to POS Supply Solutions,
“Thermal paper mills have slowed and in some cases stopped production of thermal paper resulting in a worldwide shortage. As anticipated, prices on thermal paper products worldwide have risen rapidly…We anticipate more to follow in Q1 of 2018.”
Suppliers of thermal paper worldwide are encouraging their customers to stock up on supplies since it’s limited. There is no update yet as to when Connect Chemicals will be operational but a statement by Brian Burns, VP and GM of RiteMade, might have the answer, “Connect Chemicals is the world’s largest producer of leuco dye, which is an essential component of thermal paper coating. They expect to remain closed for at least 3 months, if not longer, as they modify operations to comply with environmental regulations…A thermal paper shortage is very real and could last until mid-2018.”
As the year comes to a close you may want to prepare for an imminent thermal paper shortage.