The latest announcements on drastically increasing paper prices in a time of cost control and low inflation are a clear cause for the printing industry.
Paper prices in the first quarter of 2010 rose 12%, and there is no direct relief in the UK printing industry.
Why did paper prices rise?
Growth in Production Costs
Increasing $ (USD) and rising pulp prices are a combination of a rise in energy costs with a global rise in crude oil. This has inevitably led to increased transport costs and to the increase in freight rates for both pulp and paper.
Reduced Wood and Cellular Capacity
Hard winter in Russia, North Europe and South America has resulted in global shortage of wood. A major earthquake in Chile has compounded the problem of 20% of global short-fiber cellulose capacity. As a result, cellulosic stocks are currently the lowest level for 20 years
Decrease in European paper capacity
Since 2007, besides the structural capacity reduction of coated and uncoated papers, there are other factors such as the Finnish harbor strike and Condat Mill strikes, which had a major impact on European capacity. This is further enhanced by the fact that the UK is less attractive than comparable markets such as North America and Russia, where increased demand results in a limited European supply
The net effect is that there is a a shortage is particularly severe on the European market
Printing companies are therefore faced with a further increase in prices and a real risk of supply constraints in the short term.
margins are already very tight, it is likely that their clients have to share paper prices.
Source by sbobet