The paper market, like most in 2020, was impacted by the general slowdown in business due to COVID-19. The pandemic forced several additional closures and conversions among paper mills, which will have the long-term effect of reduced capacity.
With those changes, and the pickup in demand in the fourth quarter, suppliers of many grades are now stating that they have strong order books going into 2021 and are anticipating continued pickup in demand as the year goes on.
Trends and predictions
Based on current trends and information received from CJK Group suppliers, the biggest and most obvious challenge continues to be the supply and demand balance, but the industry as a whole is optimistic for 2021. Freight will continue to be a cost driver for the industry, with freight rates at a 5-year high and a shortage of drivers. In addition, the SEC modernization will convert printing of fund disclosures to electronic media, further eroding demand of the uncoated freesheet.
Coated freesheet
The coated freesheet price increase effective January 4th 2021 appears to have held, and RISI points to a possible additional increase in that segment in the second half of 2021. Coated freesheet operating rates are currently above 90% and are projected to increase to 95% by the second half of the year.
Uncoated freesheet
Uncoated pricing has been steady, and operating rates are expected to climb to 92% by the second half of 2021. RISI projections indicate the potential for a moderate price increase later in 2021. Catalyst has already announced increases in uncoated groundwood pricing for both February and March, but so far there have been no signs of their competitors following suit.
Cartons
Carton supplies have more recently been affected by a shortage of corrugated container board; most suppliers have been announcing price increases of 10% or more, and supplies are taking a little longer to get.
A strong partner delivers peace of mind
“CJK Group continues to maintain strong relationships with multiple mills and merchants, which affords us sustained supply if markets should become tight at any point,” remarks Martin Sullivan, Director of Procurement for CJK Group. “From a pricing perspective, CJK Group leverages its buying power to get the best possible rates, and we monitor our pricing against benchmark indices and market intel on a monthly basis. CJK Group is in continual contact with suppliers to keep pricing increases and delays to a minimum by forecasting ahead and standardizing products wherever possible.”
Navigating the paper market
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 on the basis of 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.