Paper supply crunch: buyers urged to plan well ahead

Tight supply situation "for everything from newsprint to coated woodfree and all in between"
Tight supply situation "for everything from newsprint to coated woodfree and all in between"

Print buyers are being warned to plan their paper requirements months ahead, with reports of ‘gazumping’ on previously agreed mill prices and a global squeeze on the availability of some paper types.

Bloomberg has reported that in the USA an estimated 100m catalogues will not be printed for retailers’ crucial pre-Christmas sales drive due to a shortage of paper there.

In the UK, one paper industry expert said the situation was “as bad as it was in 1995-96”.

He said that publication papers needed to be ordered a minimum of 12 weeks ahead, and potentially 14-16 weeks, with some mills reporting that all their production for the remainder of the year was now allocated. 

“I am hearing there will be presses standing in October in the US, because they can’t find the paper to print catalogues,” he added.

Paper prices that were agreed earlier in the year have also been revised upwards in some cases. 

The seasonal spike in demand comes at a time when millions of tonnes of commercial and publication papermaking capacity has been taken out of the market, or converted to packaging grades. Pulp prices have also increased sharply this year. 

SCA stopped making publication paper altogether in Q1, while Stora Enso is closing its Kvarnsveden and Veitsiluoto mills during this quarter – taking out more than a million tonnes of paper production in the process. 

Nick Gee, managing director at Denmaur Paper Media, said the supply situation was very tight. 

“Global supply chain challenges certainly apply to the paper and board industry currently, with everything from newsprint to coated woodfree and all in between being in a tight supply situation,” he explained. 

“The reopening of economies along with mill conversions and closures coupled with exceptional demand for packaging board products as clients move away from plastic have all come together to create the perfect storm. That is without the cost pressures many manufacturers are experiencing due to pulp, fuel, recycled fibre, and chemical cost inflation to levels never previously witnessed. 

“We continue to urge our clients to plan ahead as best they can however with lead times so extended many do not have the forward vision to know what they will need in three months’ time.”

EBB Paper has also warned of similar pressures in the board market, where the merchant said average lead times have gone out to more than 20 weeks.

“The market has not seen [such] sustained pressure for a prolonged period for many years (if ever). The impact of this is being felt by all users large and small,” EBB stated.

“Our aim is to make all of our customers aware and assure them we are doing our best to minimise the impact, however rising costs, extended lead times and lack of availability are making this difficult.

“With lead times now averaging 20-25 weeks, most manufacturers are quoting price ruling at date of dispatch. This is due to no visibility of the input costs so far in advance.”

EBB advised its customers to make their end-user customers aware of the challenges in the market, and to make sure appropriate price ruling clauses were in place.

This month EBB has also shared price increase notifications from BillerudKorsnäs, Iggesund, Eska, Mayr-Melnhof Kotka, Lessebo Paper and Smurfit Kappa.