"Opaque, as well as text and cover, mills are far more willing to negotiate than the coated mills. They are generally smaller and the economic slowdown has had a more direct impact on them," according to Brodock.
While not currently impacting printers, numerous consolidations followed by several mill closings could hurt paper availability, according to Roy Grossman, president of Sandy Alexander, in Clifton, NJ.
"Uncertainty is the key word here. With Sappi's withdrawal from the U.S uncoated paper and converting paper segments, we see a lack of stability in the short term. Availability, until recently, has not been an issue. However, due to production cutbacks, it is beginning to tighten."
And printers can expect to see even more cuts in paper capacity. "As expected, consolidation has removed some of the capacity. The larger economic force of the marketplace will remove still more. If not for the capacity withdrawals and mill closings over the last 12 months, prices would be much more volatile," Smith reports.
Although production cutbacks will have some impact on availability, Paparozzi is not worried about a possible paper shortage. "Eighty percent of the printers that we surveyed reported that paper is as available as always. We really haven't seen a change in paper availability. It remains very stable."
While the economy continues to take center stage, it is not the lone factor in lower paper prices. Further impacting pricing and availability in the U.S. paper market is the increase in imports from the European, Canadian and Asian markets. The year 2000 saw a 15 percent rise in imported coated paper, while U.S. production of coated paper fell by 1.5 percent.
"Our sources in the paper market have expressed concern with both foreign competition and the slowdown in our economy as they negatively affect the market overall," notes Brodock. He suspects that the domestic text and cover mills will be the most impacted by the growth of foreign grades in the American market.