Paper prices to rise again in October
Thursday, September 6, 2018
More paper price rises are on the way next month with merchants issuing letters outlining increases of up to 8% after receiving notification from the mills of the need to put prices up.
This is the fourth time this year that price rises have been announced, with rising production costs – in particular the soaring price of pulp – cited as the driving force.
Premier Paper Group, Denmaur Paper Media and Elliott Baxter have all written to their customers this week flagging up price rises that will take effect from Monday 8 October. The increases cited were between 4-7%, and 5-8%.
“We do very much share the frustrations of our customers with the current cycle of paper price increases, but the reality is that this is not just a UK increase but there is upward pressure on paper prices right across Europe,” said Premier Paper Group marketing director David Jones.
“The main driver being that, globally, pulp prices continue to rise to unprecedented levels due to demand and availability.”
Products affected include all woodfree coated and uncoated grades in reels, sheets and cut sizes, as well as office papers and a number of other board and speciality products.
“This is a big jump since last year, and my customers are asking us why the price is so much more,” said Mark Willis, managing director of KMS Litho in Banbury.
“We’ve had three rounds of 5-8%, and that’s quite a chunk. Although we update our MIS system straightaway, it’s difficult when we’re producing periodicals for some customers and have agreed a price for the year.”
One web offset printer told PrintWeek that his company had been notified of 7-8% increases in woodfree grades in October, with all other grades likely to follow in January.
“Our customers are changing the specification, frequency, and quantities of their titles as a result,” he said.
Earlier this year supplies of some paper grades were squeezed due to a “perfect storm” of global events, and non-integrated mills have struggled in the face of the pulp increases, with three European papermakers going bust this year.
Demand for pulp has ballooned in more profitable business areas such as hygiene and packaging products, while at the same time consumption of graphical papers has declined.
A paper merchanting expert said that since November 2016 the price of NBSK pulp had increased from $810/tonne (£627/tonne) to $1,230 tonne at present.
“I’ve counted nine paper price rises in the past 27 months. The first increases were Brexit and currency-related, but since then it’s been the price of pulp,” he said.
“Pulp has gone up by around £300 a tonne, while paper has gone up by £180 a tonne in that time. The suppliers are struggling.”
Premier Paper’s Jones said the firm had produced a fact sheet for customers explaining the global forces and market dynamics that are impacting prices.