Posted: Aug 31, 2018 in Industry Research
Paper markets remain very tight with another price increase right around the corner. Here is the latest.
So far this year, there have been two rounds of price increases for Commodity Envelopes, Carbonless, Offset, Opaque, Economy Coated Papers. Corrugated boxes/packaging materials, as well as one round of price increases for Writing – Text- Cover grades (Neenah, Mohawk, Monadnock). This is due to myriad reasons that include rising pulp prices, transportation challenges, and an upside-down supply/demand curve.
Given the industry circumstances, DMM has been sharing that higher prices are in the winds. The first week in August, uncoated mills (IP, Domtar, Finch, Soporset, Rolland, and Mohawk) announced a 5-7% increase that will take effect the first week of September. Envelopes typically mirror this increase, about two weeks later. In late June/early July, international coated manufacturers (XPRI, Chorus Art, and Nantucket) raised their prices for sheet fed papers. Verso (Blazer) and Sappi (Flo) announced price increases for their Web grades. If history is an indicator, their sheet fed grades will soon follow suit. Also, WestRock, which makes Tango C1S/C2S boards, announced increases of 5% for these papers effective September 4th.
Due to the upside-down supply/demand issue, uncoated mills are implementing various strategies. These include eliminating grades that they cannot fulfill orders on (ie: Finch Offset) and imposing allocations to distributors based on historical purchases. Some paper suppliers are in good positions due to deep inventory and the abundance of mills they represent. If you are out of stock, there is a good possibility that the mill is out of stock as well and you may need to shift to a similar substitute.
With all of these moving parts, you may be wondering how to keep abreast of pricing. Make sure your online supplier pricing links are up-to-date, and please use the “check my price” option online. Check out the link below to get the most recent update.