Monday, February 22, 2010
Paper Producers Continue to Look for Price Increases
Most of the major paper sectors have announced price increases, and end users are paying the new price. It appears many of the raw materials including chemicals, pulp, energy, and transportation have all increased, and the infamous black liquor credit is gone. As we outlined in past releases, the forecast will be a slow one for paper producers to recover. Demand continues to be soft and the industry continues to have too much capacity.
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4 comments:
Hate to admit it, but the industry needs additional revenue for survival. We are a small printer that, like everyone else, is in a margin squeeze. If everyone pays the increase, maybe we can pass it along to our noncontractual clients. Real catch 22 - we need the paper industry to be healthy, and WE also need to be around!
The trend for pricing between 2008 and 2009 witnessed significant decrease in paper pricing and also a decline in demand and hence shipments. Magazines and catalogues are NOT forecasting much, if any, growth for 2010 and one could argue that paper production is still in an over supply state. I would look for 5-10% price increase for 2010, and slightly more aggressive increased pricing for 2011 (assuming the economy does improve).
The real tragedy is, as paper prices increase - printers and end users look for alternative medias, as well as consume less paper, fewer pages, smaller runs and publication sizes, and cut back on unprofitable circulation. This all results in less paper consumed. Yes, the last person to leave a comment mentioned survival - this is the key initiative for the next 2 years.
yep, they need it. If the paper producers continue to loss money - no industry will be left.
Report confirmed the paper industry got $9,000,000,000 in credits. No wonder many producers showed a profit in an awful economy.
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