Spicers has announced another round of paper price rises from 1 May as local paper merchants continue to adjust to rapid increases in pulp and paper prices from mills around the world. Ball and Doggett and Direct Paper are expected to follow suit.
The three biggest paper merchants - Direct Paper, Spicers and Ball & Doggett - last increased their prices in February 2018.
Spicers says the first four months of 2018 have seen a continuation of the trend from 2017, with the majority of overseas and local mills implementing further price increases to their portfolio of products delivered into Australia of between three and seven percent.
Adding to pulp prices are escalating shipping and chemical price hikes. China has also taken out of production many smaller pulp factories, further reducing the amount of pulp available.
In a letter to its customers this week, Ken Booth, Spicers’ general manager of supply chain and product segments, says the latest round of increases - between three and seven percent, to take effect from 1 May - “are necessary due to the continued rises in pulp and ocean freight rates as well as other input cost increases from the mill side.
“In addition to this, the Chinese government has undertaken sweeping reforms for domestic paper and board producers that literally saw hundreds of small inefficient mills being closed permanently, which has in total taken several million tonnes of production away.”
“Spicers has worked with our suppliers to try to mitigate the severity of these increases as we are fully aware of the sensitive nature of upward price movements in such a difficult trading environment.
“Unfortunately, we are now in a position whereby these increases must be recovered and therefore announce a price increase effective 1st May 2018 as follows:
- Coated Papers and Boards + 5%
- Uncoated Papers and Board +5%
- Speciality Products + 5% to + 7%
- Carbonless Paper + 3%
- Self-Adhesive Sheets + 3%
- Digital Papers and Board + 5%
The paper merchant says it will continue to monitor internal costs as well as work with global supply partners to continuously seek out best practice, reduce unwanted costs wherever possible and try to ensure further price increases are minimized.
“Your local representative will be in contact shortly with more information and to distribute new price pages and any relevant files. Thank you for your understanding and continued support of Spicers.”
Tony Bertrand, national marketing manager at Ball and Doggett, said internal discussions were underway and Australia's largest paper merchant would likely follow suit. "We’re in the same predicament as Spicers, and so we’ll more than likely have to do exactly the same thing," he told Print21.
Dale O'Neill, director at Direct Paper, said soaring pulp prices meant another increase was inevitable. "We haven’t set the date yet, but there’s definitely one coming at about the same time.
"We’re all in the same boat – the whole pulp industry has increased significantly, so that’s just the way it’s going to be," he said.
In December, Tim Woods of industry bible Pulp & Paper Edge warned that the unprecedented surge in pulp and paper prices would turn the printing industry upside down with long-standing expectations of continuous lowering prices consigned to the dustbin of history.