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Paper--Price Hikes Blindside Printers!

September 1999
After a year that saw paper manufacturers' bottom lines hit rock bottom, increases are being announced almost unilaterally. A recovering Asian economy is among the reasons for the boost.


BY ERIK CAGLE


Did you see it coming? Why of course you did.

Everyone knew that paper prices were going to go up. Yeah, we don't know anyone who wasn't aware of it.

Heh, heh.

Nice try, pal.

Like a critically acclaimed Madonna movie, the July price increases left many people with their mouths agape. According to Pulp & Paper Week, International Paper, Georgia-Pacific, Willamette Industries, Champion International, Crown Vantage and P.H. Glatfelter have announced price increases of $30 to $60 per ton. P&PW also revealed that Champion International, Mead Corp., Sappi Fine Papers, Consolidated Papers, International Paper and Potlatch Corp. had proposed price increases of $60/ton on coated free sheet.

Consolidated Papers also joined Champion International, International Paper and Repap Enterprises in instituting price increases on coated groundwood to the tune of $60 per ton. The publication reported another increase could take place in October.

While prices had been rising in certain sectors, most paper purchasers wondered aloud if price increases would take hold. Some even suggested that buying paper on an "as-needed" basis would help to retard any attempted boost.

Andy Paparozzi could see the price increases slowly making their way into the mainstream. The chief economist for the National Association for Printing Leadership (NAPL) conducts a monthly study that gauges the percentage of printers who feel prices are rising, falling or stable, and also asks if availability is higher or lower than it was three months ago. Last Sep-tember, only 8.6 percent of printers felt prices were rising. That figure rose steadily to 25.5 percent this past March and to 33 percent in May. For July, however, that figure ballooned to a whopping 60 percent.

No Surprise
"It's not terribly surprising," contends Paparozzi. "Paper is an international commodity. We kind of saw the worst of the international crises last fall. Internationally, Asia in particular, economies are still struggling, but they've clearly strengthened and are doing better than they were at the bottom of the crises. That is increasing demand for all kinds of commodities, including paper. Just look at what's happening to oil prices.

"Between the strengthening of the Asian economies and the continued, remarkable performance of the American economy, it's not surprising that we're seeing this kind of widespread report of paper price increases," he adds.

 

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