Five Reasons Why Paper Prices Could Drop This Fall
Overcapacity, print demand and even China factor in.
Despite the decline of paper product use among publishers, prices for paper havenâ€™t fallen the way many hoped they would. Some say that this is the result of demand meeting supply, while others think pricing is about to change for the publishersâ€™ benefit. Terry Choate, president of Making Magazines, is among those who believe relief in paper pricing is imminent. Here are a few of his reasons why.
1. China is not buying much pulp right now, for a variety of reasons.
2. Mills are all suffering from over-capacity in all grades.
3. Recent attempts at a price increase have met resistance.
4. While print capacity has declined over the past several years, print demand has declined by almost double.
5. Guess what else? If you havenâ€™t noticed, our own economy is severely suffering!
â€śI would say that an initial decline might be small â€“ in the $1-3/CWT range. At this point there is lower demand and for this (and other reasons), there appears to be some over-capacity which should, at least initially, cap prices and likely drive them down,â€ť predicts Choate.