Is it time to look at your paper purchases?

January 20th, 2011

If you pay attention to what drives the cost of paper you might want to take a look at your existing paper and paper related contracts and think about renegotiating your prices.

So what does drive the price of paper? Well it depends on the type of paper you’re talking about. In this case let’s talk about copy paper, receipt paper and the like. What drives the pricing here is the pulp market and specifically the hardwood pulp market. You probably buy a variety of paper products from the same distributor. Your supplier may buy it from a larger distributor who may in fact buy it from a mill.

What the mills buy to make copy paper is hard wood pulp. That market at present is becoming saturated which is a good thing for paper prices. We took an early hit last year due to Mother Natures impact in countries like Chile but global inventories and shipments are headed up which means your prices should be headed down.

Your contract probably has some sort of escalator or deescalator language in that that offers some protection, but excess inventory is always a reason for companies to be aggressive in their pricing.

We look forward to and appreciate your comments.

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