Paper Outlook — Declaring War on Dumping

The Printing Industries of America/Graphic Arts Technical Foundation (PIA/GATF) also came out swinging in defense of the Asian suppliers. In a letter to Marilyn Abbott, secretary of the ITC, PIA/GATF President and CEO Michael Makin detailed four points to support the association’s stance against NewPage’s dumping claim. The following is a brief synopsis of each point:

• A steady supply of paper is vital to the U.S. printing industry. Printers invest 30 percent to 40 percent of revenues dedicated to paper purchases. “Any shortage of or disruption to paper supplies, including such shortages or disruptions brought about by the federal government imposing restrictions on paper sources, will have a serious negative impact on the U.S. printing industry,” Makin wrote.

• The current state of the paper market is competitive. Citing the U.S. Bureau of Labor Statistics Producer Price Index (PPI), paper prices are rising in excess of general inflation rates and the overall PPI. Citing Labor stats, Makin noted that average prices have increased in each of the last four years, including 6.83 percent in 2005 and 5.8 percent for the first 10 months of 2006.

“The increasing paper prices experienced by the printing industry, along with the paper industry consolidating operations to make it more cost-competitive, demonstrate the current health of the paper industry. There is no economic reason to correct or modify the supply and demand of paper in today’s marketplace,” Makin wrote.

• Increasing demand for paper by the printing industry is expected to continue. According to the PIA/GATF Print Market Index, print markets have gained “considerable strength” over the 2000 to 2006 period (see chart). In fact, the PIA/GATF expects total printing shipments to increase from $171.1 billion in 2006 to $175.4 billion in 2007.

• Additional factors contribute to print’s need for paper from a variety of sources, contends the PIA/GATF. Among them are the inability to obtain regional supply or necessary quantities of paper should sources be restricted, quality differentiation between various producers and service.