Paper markets remain very tight with another paper price increase right around the corner. Here is the latest.
Since the beginning of 2018, there have been three rounds of paper 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 many reasons that include rising pulp prices, transportation challenges, and an upside-down supply/demand curve.
Given the industry circumstances, StatementOut has been warning clients that higher prices coming shortly. Uncoated mills (IP, Domtar, Finch, Soporset, Rolland, and Mohawk) announced a 5-7% increase that will take effect the first week of February. 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.