HP TO UP PRICES ON INKJET CARTRIDGES AND PRINT HEADS

[Anonymous]

HP TO UP PRICES ON INKJET CARTRIDGES AND PRINT HEADS

Some distributors are reporting that HP has announced that it will increase prices for older model Designjet inkjet cartridges and print head by approximately 10 percent as of July 1. A table listing the SKUs for which HP is increasing pricing, plus old and new list prices, appears below. The OEM’s note to its distributors attributes the increase to “rising production and supply chain costs.”

While it is possible that some of the upward price pressure is due to raw material shortages stemming form the earthquake in Japan, this is certainly not the only contributing factor. Printer OEMs have been facing rising production and raw material costs for some time now, well before the earthquake occurred.  One reason is volatility in the price of oil. Oil prices are down a bit this month, but the price of crude oil is up about 20 percent compared with last year. Cartridge casings, carbon black, and other key components in both ink and toner cartridges are petro-chemical based, so higher oil prices put pressure on OEMs to raise supplies prices. The industry saw most printer OEMs and even some remanufacturers raise supplies prices in late 2008 and early 2009 when oil prices reached record highs.

HP is not alone in feeling the need to protect its margins by increasing pricing. Recently, The Recycler reported that Sun Chemical has raised prices for some ink prices, citing increases in raw material costs. The company issued separate announcements increasing prices in North America on June 3 and in Europe on June 16. Sun cited “an unrelenting elevation of costs on raw materials,” stemming from reduced capacity and increased demand. Sun Chemical also raised prices in February of this year citing similar factors (see “Sun Chemical Raises Ink Prices”).

It will be interesting to see if this is the extent of the price increases for HP or if it is a harbinger of more prices increases to come. Supplies price increases might prove devastating for an industry looking to drive print volumes again following a recession and the increased popularity of the many electronic alternatives to traditional print media.

[Author]

June 23, 2011 at 1:01 PM