U.S. Paper Prices Increase as More Companies Try to Stay Profitable
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According to a report this past week by Benzinga, Detroit, Mich., USA, in this era where every business is moving online, businesses and consumers alike still depend on paper, especially in various packaging and shipping markets. And some trends should benefit companies operating in the paper and packaging industry,
Meanwhile, rising wood pulp and paper prices will flow on to paper-based packaging products and services. According to IBIS World (Santa Monica, Calif.), the price of wood pulp is forecast to rise even more at an annualized rate of 5.1% in the three years to 2019. The rising price of wood pulp will also be reflected in the domestic U.S. price of paper, which is projected to grow at an annualized rate of 3.2% in the next three years.
Falling demand has been causing contractions in the paper manufacturing industry, and is a systemic problem that will continue indefinitely. Companies and consumers will continue to find ways to use electronic media to save the money that was once used on paper. Paper manufacturers know this and will likely continue to contract to prevent their businesses from becoming altogether unprofitable.
IBIS said that even though wood pulp prices are expected to reach historical highs in the coming years, it's not all bad news. Paper-based packaging manufacturers are in a strong position to protect their profit margins, with rising demand for packaging products and solid negotiating leverage.
Paper-based packaging producers and suppliers will have ways of counteracting rising input costs while growing demand for paper-based packaging products will allow firms to continue passing on some of these costs to buyers.
