Nearly a quarter of the way through 2022, there are still many ongoing issues that we anticipate will continue to complicate the paper market for the foreseeable future.
Since our last paper market update in January, we have seen paper allocations continue to tighten, additional pricing pressures across nearly all paper grades, and the impact of further supply chain issues due to the Russia-Ukraine conflict overseas.
With that update in mind, we’d like to provide an additional update on the state of the paper market in our efforts to keep our key stakeholders well informed of everything that is currently going on.
To begin, we believe that it is important to share that it is almost certain that we will see additional pricing increases across all grades throughout the remainder of 2022.
While we are not able to make specific predictions on what these increases will be, paper suppliers have established a pattern over the last 1-2 years that suggests that these increases will almost certainly continue in 2022 and beyond. Additionally, we are now seeing costly freight surcharges being added due to the high cost of fuel.
In addition to pricing increases, we have seen even tighter markets as of late with allocations impacting even harder across all grades.
Most Uncoated Freesheet (Opaque grades) are now full through the end of the year. Coated Groundwood grades (#4’s and #5’s) are now closed through July and allocations in that market are reducing available tons even further. Coated Freesheet (#2’s and #3’s) allocations are getting hit with continued reductions, and cover stock in these grades are very difficult to come by as well.
Arandell has taken great pride in its ability to manage its own allocations, while still providing our customer base with the necessary paper they need to properly execute their mail campaigns. However, the near certainty that these allocations will continue to tighten needs to be mentioned and integrated into 2022 print marketing strategies.
In terms of other issues affecting the current paper market, we no doubt need to make mention of the Russia-Ukraine conflict that is currently ongoing. This conflict primarily affects the paper market due to these country’s roles in supplying significant pulp to paper manufacturers.
Adding this unanticipated event to increasing energy costs, trucking shortage issues, rising freight costs, strikes going on currently at UPM, as well as shipping container issues and backups at shipping ports, the paper market is unfortunately getting more and more difficult for our experts to predict.
Here at Arandell, we want to continue to urge our customers to practice proactivity and flexibility when it comes to their work. We are strongly urging our customers to finalize their events as soon as possible to help with managing our allocations and supply chain issues. This is the #1 way to mitigate these challenges at the moment and the best way to ensure your work can be completed and distributed on time.
Additional flexibility in terms of specific paper choices is going to be another meaningful way to mitigate the challenges currently facing the paper market. Due to tighter allocations, there may be instances where more of a different paper type or grade can be acquired in replacement of another. While we have every intention of providing customers with their selected paper, there may be instances where this is out of our control.
Customer flexibility in paper choice is going to be the best way for all parties to mitigate these issues as much as possible.
Arandell will continue to provide a consultative approach to the challenges ahead to do what is best for your brand. As a current customer, please feel free to reach out to your account team at any time who will be happy to provide you with additional information and support. For non-customers, please contact our team at marketing@arandell.com, who will put you in contact with the right person.