Paper Outlook for Q2 — Prices Holding Through Spring

"We now know that the surge in paper buying in 1995 was caused not by a jump in consumption demand, but by an increase in anticipated demand against forecasted supply, and a desire to avoid expected future price escalations," says Norman Scharpf, president, GCA.

"As a result, inventory levels got out of hand, buying stopped, and prices dropped in the second half of the year. Many buyers were saddled with inflated inventories at inflated prices that took months to work down, with many paper companies feeling the effects. Clearly, this is not the way the paper market should operate."

GCA's Electronic Data Interchange committee directed creation of the Paper Inventory Database. An advisory group of representatives from paper mills, printing plants and magazine publishers assists in developing the measures and reports. Call (703) 519-8173 or visit GCA's Web site at www.gca.org/invent/index.htm for more information.