March 10 , 2021

NEWS

Paper Price Increases Driven by Cost Inflation – Not Simply Supply/Demand

The flurry of recent price increase announcements is not being driven solely by the impact of capacity reductions on supply/demand balances. Cost inflation is emerging as a major theme across commodities. The proposed price increases’ size and prevalence reflect accelerating momentum in cost categories such as chemicals, market pulp, and especially transportation. The widespread price increase announcements throughout the encore pulp and paper sector suggest that producers need price recovery both to recover profitability lost as prices declined in 2020 and to keep pace with the rapidly emerging cost inflation, suggesting a strong possibility that many of the widely supported graphic paper price increase announcements will simply go through in full as scheduled. (RISI)

Postmaster General’s New Plan Could Include Slower Mail and Postage Hikes

U.S. Postmaster General Louis DeJoy is set to implement a new strategic plan that includes higher postage rates and eliminating the first-class tier of mail. The plan to eliminate first-class mail, which includes letters, magazines, and catalogs, would slow down mail that typically arrives within two days and make it more costly to deliver for both consumers and businesses. All first-class mail would be lumped into the same three- to five-day window as non-local mail. Hamilton Davison, the American Catalog Mailers Association President, said, “Now is not the time to aggressively increase prices when so many businesses are struggling. Higher prices will force more mail out of the system and contribute to a postal system death spiral.”

PCA to Permanently Convert PM3 to Linerboard at Jackson Alabama Mill

Packaging Corporation of America has discontinued production of uncoated freesheet (UFS) grades on the No. 3 paper machine at its Jackson, AL mill and will begin preparing for the machine’s permanent conversion to linerboard. To meet strong packaging demand and maintain appropriate inventory levels, the machine temporarily began producing linerboard in the fourth quarter of 2020. It continued producing linerboard in the first quarter of 2021. The mill will now begin preparations to permanently convert the 365,000-ton per-year No. 3 UFS paper machine to a 700,000 ton-per-year high-performance, virgin kraft linerboard machine, in a phased approach, over the next 36 months.

American Forest & Paper Association Releases January 2021 Printing-Writing Monthly Report

According to the AF&PA, total printing-writing paper shipments decreased 25 percent in January 2021 compared to January 2020. U.S. purchases of total printing-writing papers decreased 22 percent in January compared to the same month last year. Total printing-writing paper inventory levels increased three percent when compared to December 2020. U.S. purchases of coated free sheet (CFS) papers in January decreased 32 percent compared to last January. Coated mechanical (CM) paper shipments decreased 33 percent compared to January 2020, while the inventory level remained essentially flat (+0.1 percent) compared to December 2020.