Leuco Dyes: What’s Happening?

The one-million ton global thermal paper market was jolted in Q3 of 2017 when the largest supplier of leuco dye, Connect Chemical, was shut down. Leuco dye is the developer used for thermal coating in products such as receipt paper. This developer produces the image on the paper when it is activated with temperature changes.

The shutdown was estimated to be a minimum of three months while the chemical park’s shared waste water facility was required to go through a re-approval by the Chinese EPA. The worldwide shortage of leuco dye has adversely affected the availability of receipt paper with allocations being implemented and creating price volatility. The effects of the shortage are expected to last into mid-2018. The good news is, as of January the plant is up and running, albeit at a limited capacity. Additionally, with the increased cost of the developer, manufacturers that had exited the market place in recent years due to competitive prices are re-engaging with their available production capabilities.

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