The Rising Cost of Paper
3rd April 2018
OG Group

Since October 2017, the paper market has experienced an across the board price rise. As raw materials such as pulp and chemicals have increased in price, this has led paper mills to increase the price of paper, and all other paper based products, in order to remain sustainable. In April, it is expected that there will be another steep price increase for the price of paper by as high as 8-10%. Here are four of the main pressures at each stage of the supply chain that have contributed to rising prices:

 

Shortage of pulp

Paper is manufactured from paper pulp, which is currently in short supply around the world; therefore it is increasing in price due to popular demand. The shortage is due to changes in China’s environmental policy, as the country have banned the import of mixed waste paper, and so many consignments of pulp have been turned away.

Demand for production

As pulp is in short supply, the output of paper has also reduced. This means that the fall in production has further increased the demand for paper products, and has put greater pressure on local mills to make a sustainable return – and so prices have risen.

Cost of logistics

With Brent Crude Oil prices having risen by over 13%, logistics costs, too, have increased. In order to minimise the impact of logistics costs on their profitability, many paper mills have begun selling to local markets instead. This has made it more difficult for European buyers to source paper from China, the Far East and America. Therefore, the demand for European paper mills has quickly grown.

Currency exchange

Following Brexit, Sterling continues to remain weak against US Dollars and Euros, in which most mills operate. Therefore, the weaker exchange rate means that paper products are more expensive to buy in Sterling, which has further driven up cost prices for UK buyers.

 

At OG, we’re here to help our customers, no matter what the situation. If you are worried about the rising cost of paper products, our sales reps will help you to determine the best way to get the products you require, as well as advise you on your purchasing cycle, and how to amend your usual orders to include recycled paper. OG can also support with a call off facility from bulk ordering for enhanced efficiency.

To find out more about the best solution for your paper based deliveries, please call 01483 511411, or email us at sales@officegold.co.uk

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