Despite the decline of paper product use among publishers, prices for paper haven’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 publishers’ 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 haven’t noticed, our own economy is severely suffering!
“I would say that an initial decline might be small – 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,” predicts Choate.