December 18, 2017
On behalf of the Iconex Companies, I would like to provide an update regarding the circumstances that continue to impact the global thermal paper market.
As mentioned in previous communications, Iconex’s highest priority continues to be ensuring adequate supply for all our existing customers. Based on our proactive measures, I am happy to report that we have and continue to meet our objective. These efforts have also well positioned Iconex to support your growth as we move forward into 2018.
Although it is anticipated that Connect Chemical, the primary supplier of leuco dye, will resume production soon, there continues to be a shortage of leuco dye in the world. In addition, we have been notified that a critical intermediary chemical needed for production remains in very short supply. Based upon all current information, we are not expecting a normalization of supply within the thermal paper market until the second half of 2018 at the earliest.
The leuco dye that is available has been selling at a significant price premium compared to early 2017. In the last 7-10 days we have received additional price increases / surcharges from all our suppliers to address the additional premiums that ensure supply for our collective need. All suppliers have indicated that these increases / surcharges will be in place through the end of Q1 2018 and will then be re-evaluated.
As a result, we again ask for your partnership to continue to execute our critical supply strategy. Although these unprecedented events are beyond Iconex’s control we are announcing a surcharge of $.85 per MSF on all thermal paper orders shipped on or after January 22nd, 2018. All orders are subject to historical purchase allocation. At a minimum, the surcharge will last through March 31st, 2018.
While we are committed to eliminating the surcharge as soon as possible, our primary objective will continue to be securing adequate paper supply to meet all of our customer needs.
I remain personally committed to managing the situation as market conditions evolve. We will continue to be proactive in providing real-time communication so that we can all plan effectively to deal with these uncontrollable circumstances.
Your Iconex sales representative will be in contact to provide detailed information related to the surcharge and any additional information as it becomes available. As always, you can also find the latest market information at www.iconex.com, www.ritemade.com, and www.pmcompany.com.
We appreciate your valued business and continued support!
Craig A. Gunckel
Chief Executive Officer