Lower than expected demand through the first half of the year and a steady inflow of paper from the Pacific Rim kept the pressure on subsequent announced price increases for coated free sheet, Dethloff reports. "However, coated groundwood pricing held its own as the Mirimachi mill strike continued and exporting from Finnish mills was interrupted."
To address the uncertainty created by the strikes, Arandell let its regular suppliers know what paper requirements it had in the pipeline through the end of the year. "We are focusing on fewer mills with which we want to do business, and intend to strengthen our relationships with these mills and their distributors," Dethloff says.
Song Remains the Same
The paper management advice the printer has been giving to its customers remains basically unchanged. "We prefer to recommend grades to our customers that perform best on our presses and consistently meet both of our expectations. By using recommended grades, we can minimize waste, obtain quicker color approval and assure a source of supply," Dethloff asserts.
"We encourage customers to place paper orders early to ensure availability and caution them on the risk of solely shopping on price rather than establishing themselves with a dependable supply source," he adds.
Dethloff expects the demand for all coated grades to be very strong throughout the rest of this year. "Price increases on lightweight coated groundwood grades were announced for deliveries beginning July 1," he points out. "However, we would be surprised to see any price increases announced for third quarter delivery of coated free sheet grades because it will take a while for demand to surpass inventories."
Assessing today's paper market requires a global perspective, according to Dethloff. Paper companies are aggressively competing with each other for market share in the U.S., Europe and Asia, but there's also competition within the organizations for capital to support mills in these regions, he notes.