Pressure on paper supply and raw material costs to push prices up


Dealers are being encouraged to prepare themselves for paper price rises caused by the ‘perfect storm’ of conditions.

A shortage of paper, increasing production costs, logistics costs and currency pressures are all pushing prices up according to conversations Dealer Support has had with paper merchants.

Predictions regarding the actual price increases vary, with some forecasts suggesting prices could shoot up by as much as 10%. Others suggest around 6% is a more accurate forecast. Coated and uncoated papers are likely to increase.

Raw material cost increases apply to pulp, chemicals, distribution and, in some cases, water, leading to mills having to increase prices in order to remain sustainable.

An article in PrintWeek says that paper makers Lecta and The Navigator Company have announced or implemented increases. The latter announced increases in the UK of 6% to 8% from 1 January 2018, indicating the move as a further reflection of the “continued pressure on the industry’s cost structure”, heightened by a record level of incoming orders and extended lead times.

German paper manufacturer Zanders has also indicated rises of 5% to 8% on all grades from 1 January 2018, citing increases in raw material costs.

Paper shortages, exacerbated by machine failures and production incidents at mills around Europe, mean there are now longer lead times for paper imports. Many merchants were already buying on allocation before the mill incidents.