The paper market is getting tight. Coated paper producers are already over-sold into September. Price increases from the mills have continued across the board on all grades of paper, and some mills are refusing additional paper orders for the balance of the year. Coated paper is particularly hard to come by and mills are becoming less and less flexible.
Pulp costs are up 40%. Corn starch is up 80%. (Corn starch is used when making paper to increase dry paper strength and improve surface conditions, as well as acting as a binder in paper coatings). Freight is up 45% and fuel is up 40%. Add those all together and you get a market with soaring prices.
There is also a transportation shortage. Today there are 8 loads to every one truck (based on National Load-to-Truck Ratio data from DAT Freight & Analytics). In the past, the common ratio is between 2 to 3 loads per available truck.
Record low inventories of sheet-fed and digital grade paper remains. The mills are not able to replenish due to increased new orders which means lead times have significantly increased. Orders need to be placed at least 12 weeks in advance. This is important to bear in mind as Autumn is only 5-weeks away which means holiday printing begins shortly after.
Paper prices already increased in April/May and July of this year. Unfortunately, when it comes to paper, we need to be prepared to pay more and wait longer this holiday season.