Publishers will have to contend with a continually changing paper industry in the 4th quarter of 2018 and into the foreseeable future. As a result, it will be more important than ever for publishers to be aware of those changes as they happen. It is a great opportunity for publishers to build a better relationship with their print partners by understanding what is happening in the paper market. Built from deep-rooted relationships with our experienced paper merchants, we communicate daily to receive industry reports and, paper data, all in real time with the market. There is a close eye kept on the market, using other credible sources to further educate and prepare ourselves for the uncertain future. We would love to share information that is received daily about the current paper industry and what is being done to support our partnerships.
State of the Industry
Due to the shutting down of several mills, there has been a significant decline in paper availability for both uncoated and coated paper due to the reduction in capacity in the North American market. These market capacity reductions place stress on the market by reducing paper availability and, creating challenges for printing companies to meet publisher demands. In fact, without a contract, finding paper can result in long wait times and some mills are having to refuse business due to the shortage. This trend is expected to continue well into 2019.
Over the course of the next six months and even into next year, the experts believe the industry will continue to see market pricing pressures. It is anticipated that there will be more machine conversions and consolidations in the paper industry. Fortunately, we forecast our needs far in advance to understand what will be needed to complete all our publishing partner’s jobs.
As the market shrinks, it is anticipated there being less paper options. Many of the color and finish options will be discontinued or phased out because of the reduced capacity in the market.
Statistics on the Current Market:
- Uncoated groundwood and uncoated freesheet demand increased 5.8% and 0.03%, respectively. Whereas coated groundwood and coated freesheet demand decreased by 5.3% and 10.2%, respectively.
- This equates to a 20% capacity reduction in coated freesheet capacity for 2018.
- Under these circumstances, Verso expects prices to raise 8.9% for coated freesheet and 9.8% for coated groundwood.
- Catalyst Paper has sold three of its locations to Nine Dragons, a Chinese company, for $175 million. However, Catalyst Paper still has several locations in Canada and a sales office that is in Seattle, Washington that are unaffected by the deal.
- With the recent acquisition of Catalyst by Nine Dragons, they now control 5.6% of the coated freesheet market, 36.2% of the coated groundwood market, and 16.2% of the uncoated groundwood market. Although it is unsure of their intentions, Nine Dragons may covert the machines to produce other paper, or transfer the pulp to another location.
- Communicating you needs in advance, provides the best opportunity for us to ensure that we will secure the needed paper supply at the most competitive price available.
- Reading and understanding industry trends, we will better understand one another.
- View your printer as a partner – we’re here to work together for a common goal.
- Testing files with printers will help avoid costly reruns.
- Ask questions, be assertive – we’re here to provide solutions to your problems.
How Can We Help?
- We have long standing, 20+ year relationships with three mills who’ve endured the industry for over 60 years.
- Each day, we receive industry reports, paper data, all in real time with the market that helps us be proactive instead of reactive as the market changes.
- Thanks to our Make and Hold program with our vendors, we’re able to receive paper within two to three days for certain grades.
- We have a 1.3 million square foot manufacturing facility, and a substantial amount is allocated toward the storage of paper.
Market demand has decreased, availability is deficient, uncoated and especially coated paper has grown costly; however, these aspects of the industry are no match for the combination of our established relationships with paper merchants, experts within Thomson Reuters and our effectiveness in doing business. By working together, we believe that we can build a partnership by exceeding your expectations by getting you the paper you need and, producing superior quality books: All within your timeline and at a great price.
The Print Experts at Thomson Reuters Core Publishing Solutions