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| Paper Update 08-20-10 |
| Friday, August 20, 2010 |
|
As we move through the third quarter of 2010, we continue to monitor a paper market that can be described as, if nothing else, volatile.
With the most recent price increase announcements ranging from $2cwt -$3.75cwt, this year has seen three market wide increases affecting publication grade papers (coated free sheet, coated groundwood, and SC). Prices have increased (on average) 15-20% from the beginning of the year.
Mills have the wind in their sails (at the moment), and cite the following factors for the increased prices::
Additionally, most mills are facing challenged business models and (for some) the loss of the Black Liquor Tax credit. Increased costs and a falling demand over the past few years have pushed change upon a over supplied industry. 2011 however, remains uncertain. With an eye on the US dollar, European producers could once again increase shipments to the US. The troubled US economy, as well as the recently proposed postal rate increase, will also play a major role in what happens to paper prices. With no increase in demand, mills will be challenged to continue to raise prices in 2011. If the economy rebounds and/or we see further shakeups (rationalization) in the paper marketplace, then we could see additional attempts for further price increases. Paper Suppliers and Market News
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