Paper mills haven’t kept pace with inflation

By Tom Stundza -- Purchasing
Pulp prices, which have been rising monthly since March 2006, will increase again in December. But, if the pattern holds, buyers at paper mills won’t pay the full $30/metric ton increases all at once. The new price hikes have been announced by Fraser Papers, Pope & Talbot and Marubeni Pulp & Paper North America.
Meanwhile, Brazil’s Aracruz, the world’s largest market pulp producer, has informed customers worldwide that it will increase bleached eucalyptus pulp prices $30/metric ton. The increase would bring Aracruz’s bleached eucalyptus price to $805/metric ton in North America, $780 in Europe and $720 in Asia.
The problem for paper mills is that price increases haven’t kept pace with raw materials increases. While the pulp price index tracked by Purchasingdata.com has increased by 39% from January 2006 to November 2007, the paper price index has inflated by just 10%.