Paper Companies Now Have the Power to Charge More

 

Increased prices to raw materials such as pulp and chemicals should continue through at least 2019, as no significant new capacity is foreseen in this timeline. Furthermore, new PS (pressure sensitive) suppliers will be challenged by two factors: a high barrier to entry, which includes long development/qualification times and capital requirements to repurpose mills. There is also an expected increased demand for PS materials (4% growth per year AWA).

While new high prices and real profits might be desirable to potential new market entrants, getting into the PS paper business isn’t something that can happen overnight. It takes years to develop these grades and get them qualified throughout the supply chain.

Steadily increasing demand for labels is showing no sign of slowing down. It is forecasted by at least three market watchers, still, that the warehousing labels space is growing at a clip of 10% year over year!