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“Pulp friction” or how the shortage of paper pulp is causing the printing industry problems.


Since the start of the pandemic, we have seen several paper mills & some paper converters sadly close due to exorbitant raw material costs, a result of unstable situations in logistics, energy, the paper business in general. 

Also at the start of the school season the media was already reporting about the lack of supply of schoolbooks and the shortage of paper pulp is only rising. Where there was overcapacity not so long ago, there is now a reversed situation.

Driven by the high demand for carton & paper in (online) packaging & commercial, for pulp used in hygienic products like facial masks, diapers up to toilet paper, the market is now seeing a price rise due to shortage.  Marco Eikelenboom the CEO of paper producer Sappi Europe says they have been raising prices in recent months and will continue to do so for the foreseeable future.  "We depend on raw materials that have increased in price by 50 percent in a short time since February”. Energy has also become more expensive in a short time. As a result, customers then pass on those higher prices. 

 "The consumer who buys print, like magazines, Christmas cards and calendars will feel something. That is inevitable.

Also Wouter Haan from the Netherlands based printing company Reclameland/Simian states that the paper market is changing.  “Paper has become 15 percent more expensive for them, if this continues one will quickly arrive at a price increase of 20 to 25 percent." At the moment there is “pulp friction", he says, pointing to the persistent shortages. They stocked up on extra paper this summer so as not to run out later this year.  At a certain point, supply and demand must come into balance again, so that we can return to a normal situation he says.

According to the Touché Cards company, Christmas cards for example are also becoming more expensive.  "Our purchasing prices have increased (partly) this year due to higher paper prices and more expensive packaging materials, but mainly due to the extreme increases in (container) transport," says Hans Duran of the company. According to him, the price increase for now is limited to cards from China.  "We will not increase the price of Christmas cards produced in the Netherlands or Europe this year." 

So, will consumers and companies feel the shortages in the paper market in their wallets? With the actual high demand and low supply, you know the answer. 

One better prepare and communicate to printers and them in their turn to their customers of what’s to be expected!

I for one hope I will still be getting some nice Christmas cards this year - preferably produced in Europe. 



Sources:

Sappi Europe - NOS - Nederlandse Omroep Stichting / Dutch Broadcasting Foundation.

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Paul Sherfield

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The large forest products companies can get more money for the product and pulp by movong product into packaging board etc and into other non print markets. Stora Enso have all but exited the commercial paper market. Prices are lower now for commercial papers in real terms then they were 30 years ago: http://www.missinghorsecons.co.uk/wordpress/2021/07/musings-on-paper-and-printing-costs-and-prices-over-the-decades/

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