Paper is harder to come by.
Paper supply: why it's tight
A Holland Litho representative recently attended a webinar presented by one of North America’s largest paper merchants. The webinar focused on paper supply for 2022 and beyond. We thought we might share with you some points from the meeting.
Why we're tight:
- Mills in North America had cut back due to decreased demand before the pandemic
- During the pandemic, foreign suppliers gave up many container spots due to the decrease in demand
- Ports weren't functioning at normal levels leaving many ships out to sea waiting to off-load
- Even if we were able to operate ports 24/7 we don't have enough trucking capacity to take it all
- Accumulated inventory levels have shrunk to almost nothing at the mills and at the merchants due to supply and demand levels
How we can improve:
- Reduce varieties at domestic mills to increase efficiency and decrease waste
- Equipment upgrades to increase efficiency
- Plan ahead and order in advance
- Increased shipping and container spots on ships (containers have gone from $2000 to $10,000)
What do they expect:
- It would cost $750 million to get back to pre-pandemic inventory levels; 13% more coated and 4% more uncoated
- They don't expect we will get back to those levels but will function in an "inventory light" mode going forward
- They don't expect there to be big capital investments in mills to increase production
- Will need more planning, forecasting and pre-ordering going forward
- They expect the end of the year to look just like it does now
- Mills will do maintenance over the summer months that will cut production back slightly
- They don't see the pulp supply as a problem for the foreign mills
- The strike is scheduled to end 4/16/22 (they didn't say, but we think it’s the strike in Finland where 70lb text is made)
If you have any questions, please contact your sales rep. The take-away here is that please, plan ahead for your printing projects, and expect more lead time to acquire your paper for large orders!