Q4 Paper Outlook–Caution in a Moderate Market
“Typically, with the cyclical nature of the paper business, prices usually get softer, go down or stay stable during the year, especially in the fourth quarter,” he reveals. “I would surmise further erosion of pricing as this year comes to a close. In fact, I wouldn’t be surprised to see some lower prices yet again in the fourth quarter.”
Barbara Dohman, vice president of production at Colortone, a midsized commercial printer servicing the Washington and Baltimore metropolitan areas, agrees that maintaining a conservative inventory is smart business.
“More recently, quantities of paper have been at our beck and call,” she explains.
“With projected rates of increased production through 1998 to be 2 percent for coateds and uncoateds (according to most paper predictors), I feel comfortable that, at least for the foreseeable future, I will not lack paper on which to print for the price I want to pay.
“Knowing that paper is readily available—in most cases, at stable, non-fluctuating prices—enables print buyers to drag their feet in actually placing larger orders until absolutely necessary,” Dohman states.
There was a time, though, when that statement would have been absolutely false—circa 1980.
Colortone’s Dohman remembers this period well. “Back in the late 1980s we were forced to convey to customers that we could only hold prices based on uncontrollable increases in paper costs, especially on sheetfed offset and coated grades,” she states.
At Cedar Graphics, of Ronkonkoma, NY, Vice President Michael Clark reports that the standard purchasing procedure at his firm is to batch orders, entitling Cedar to volume discounts.
Many Large Clients
“Our criteria for purchasing paper naturally includes quality, price and availability,” he says. “We have many large clients that require the same stock repeatedly, so we purchase very large volumes of these stocks and have them available at all times.”