It is no secret that the paper market has been downright volatile the past few years. From rising wood pulp costs and mill closures, to mills converting from the production of paper to packaging and specialty paper products, to the discontinuation or unavailability of certain brands, there have been many contributing factors to the paper market’s shakiness (see Sheridan’s previous post The Scarcity of Paper – Pulp (non) Fiction). So as we turn the corner and start a new decade, will the paper market turn a corner and become more stable?
“The future of the paper market is always hard to predict and can be influenced significantly by numerous factors. The supply and demand balance can swing quickly and dramatically,” comments Martin Sullivan, Director of Procurement for CJK Group, Inc.
Based on current trends and information received from CJK Group suppliers, 2020 is starting out stable. After hitting a 10-year high last fall, “pulp prices have since declined due to high supplies, weak China export demand, and heated competition between domestic and offshore producers,” reports Midland Paper. “Mills have been taking machine downtime to try and balance supply with demand, rather than lowering program pricing.”
Mill closures seem to be subsiding and equipment conversions appear to be less attractive due to an overcapacity in the container board market. Midland Paper speculates, “Overall supply reduction should help stabilize the market to a degree, but even with planned conversions, the paper market is still facing demand pressure. Magazine ad pages and catalog circulation were both down compared to the previous year.” With 2020 being an election year, the production of new and backlist political titles are likely in the second half of the year and paper demand could spike. Further capacity reductions in 2020, paired with an increase in demand, could result in a demand greater than capacity and spark price increases.
The one thing that publishers can do is partner with a printer that has their best interests in mind and takes actions to minimize the impact of a negative market on its customers. “CJK Group maintains strong relationships with multiple mills and merchants,” remarks Sullivan. “Our strong buying history, credit, and trusted relationships position us to get the best possible rates, and we continually monitor our pricing against benchmark indices and market intelligence. Our relationships with multiple vendors also provide us an advantage toward maintaining a supply of paper when the market tightens.”
Regardless of the paper market, best practices that publishers can establish to help their projects flow smoothly include communicating paper needs and scheduling press runs early, requesting paper based on grade versus a specific brand, and looking to your printer to advise you of your best options.
For guidance on how to best navigate the paper market, and for help choosing the right paper for your project, the sales and customer service teams across the CJK Group companies stand ready to assist.