State of Supply: Bond Paper
They knew it in ancient Greece, even before the time of Socrates – It was Heraclitus who gave us: “the only constant is change”
And his observation rings true in today’s paper market, as prices are poised to increase. Indeed, the times they are a-changin’ (to quote a more recent immortal philosopher – Bob Dylan)
So what’s causing the change?
The world’s increasing use of electronic communication has meant a vast reduction in the usage of paper. This has been a long-sought goal of the computing industry. One of the consequences is manufacturers are finding it unprofitable to continue to produce the 20-lb. bond paper we’ve become so familiar with (the kind used in Xerox copiers and inkjet printers for every-day printing).
To demonstrate how serious the situation is, the talk in the industry is that one major manufacturer has already shut down a mill and two more have shutdowns pending.
So, fewer producers means there is less paper available for the same number of people seeking it. For the remaining mills it could be beneficial – basic Economics 101 supply-and-demand drives profits up – but for the consumer it means higher prices.
To add fuel to the flame of volatility, periodic shortages increase panic buying by major end-users to ensure they have a long-term supply. These major purchases further limit availability and prices again go up.
There is the possibility that suppliers will bring in overseas 20 lb. paper, but that won’t happen until months of testing take place to make sure the paper is up to the same standards the market requires. One issue that has been around for some time is a difference in brightness. Given the demand, however, this issue may take second place to fulfilling orders.
Meanwhile, Scantech Graphics will, of course, seek the most competitive prices for paper while maintaining the quality our clients here in San Diego and across the nation expect from us.
And hopefully Heraclitus’s adage will mean the overseas solution brings some stability back to the equation.