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Printers Winning on Paper

April 1999
BY ERIK CAGLE


Let's face facts. Paper is not exactly chic these days. There is nothing more appalling than a printing commodity strutting around while wearing last year's price tag.

Unless, of course, you're a paper purchaser for a commercial printer. Unchanged prices make this person the most popular man/woman in the eyes of estimators and the person drawing up the next budget.

That explosion you heard was definitely something else, not an increase in paper prices. Uncoated free sheet experienced a first quarter boost in some circles, but a number of observers wonder if they will take hold.

In short, nothing's changed since the first quarter. The market is still as "soft" as it was in the second half of last year, and some pundits are actually predicting prices will reach the rock-bottom level realized in 1996.

One paper purchaser for a major national printer, speaking on the condition he not be identified, admitted that a degree of the paper stagnation is due to the fact some printers are seeing some softness in print volume. Given that April-May is typically a slower period for printers, demand won't be juicing prices any time soon.

"Happy days are here again for the publisher," exclaims Bruce Janis, president of MSPGA: Management Science for the Publishing and Graphic Arts and a consultant with his hand on the paper pulse. "This is a very positive environment for publishers. Conditions have continued to soften, and prices have continued to weaken. I see continued softness in the near future."

Not only is Janis confident that prices will not go up in the second quarter, he believes printers can budget for flat or decreasing paper prices in both the third and fourth quarters of 1999.

There is little question in the minds of some followers that the slowed growth in the commercial printing industry has helped retard price levels. Andrew Paparozzi, chief economist for the National Association of Printers and Lithographers, believes an economic kickstart in the industry is needed before paper mills can enjoy a pricing upswing.

"We need to see stronger growth in the printing industry, and stronger demand from printers. Right now, paper is available and there's no reason for printers to be stockpiling it," Paparozzi points out. "There's no indication that prices are going to rise, so there's no reason for printers to be hedging and building inventories as protection against possible future price increases.
 

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