Copy Paper Pricing
The Third Price Increase this year announced on Copy PaperSome Concerns about allocation of Copy Paper later this year.
The wide format paper pricing for plotters and engineering printers has been pretty stable over the last 10 years. However it looks like 2018 is going to be the year the paper mills push thru some hefty price increases.
There have been two six (6) percent price increases implemented by the paper mills on copy paper already this year. One in January, and the other in April. Dietzgen, our primary source, has just announced another increase of at least 6% effective June 25th . Some of our secondary sources have announced that some copy papers will increase up to ten (10) percent in June. A fourth increase later this year would not be a surprise.
There are only three or four paper mills in North America that produce the copy paper used in the engineering printers and plotters. One of those mills has announced a shutdown of the lines which produce copy paper and a conversion to more profitable products. This shutdown will reduce the amount of paper available from the mills and puts the mills in a positon to raise prices.
The mills did something very similar back in the late 80’s and early 90’s that also resulted in a significant price increase. The paper converters were put on allocation which restricted them to ordering only the same amount of paper they had purchased in the prior year. The mills promised to continue to provide paper to their loyal customers and restrict or reject new business. Once the profit improved the paper mills found a way to produce the needed volume.
During the allocation some distributors had to use paper from South America and China. It was paper but did not offer the quality or consistency of the papers produced in North America. The products may have improved but with so many trade tariffs floating around they may not be priced competitively.
If one of the mills follows through with their plan to shutdown one or more of their lines it could put some converters in a very tight supply problem and having to scramble for inventory. If they can find a source it may be at significantly higher prices.
Xact Supply is one of the largest providers in the State of Florida for wide format copy paper. Our sources have assured us that we should not experience any supply interruption. Our primary source does not purchase paper from the mill that is planning a shutdown. They use the two largest mills for copy paper and therefore do not expect any delivery problems.
Rest assured that we at Xact Supply will take steps to assure we remain competitive and do not have any supply problems. As an Xact Supply customer we want you to be aware of what is happening in our industry and plan accordingly.
As mentioned earlier, this is not the first time (and probably not the last time) this has happened. It will be resolved when the price gets to a level that is more profitable for the paper mills. That will result in more paper mills or production lines dedicated to wide format copy products.
We want our customers to be informed and will let you know if conditions change. If you have any questions or concerns, please give us a call.