Rising paper prices - What's happening?

Veröffentlicht auf 14 März 2022

You may have noticed it with your last orders: your books or packaging have suddenly increased in price, or the delivery time is a lot longer than you are used to. Everywhere the prices of products and services are rising sharply and there are more and more shortages of raw materials. The printing industry is also in crisis and is seeing significant price increases and a growing shortage of paper.

Strong increase in paper prices

Intergraf (European federation for print and digital communication) notes that paper prices have increased by an average of 45% over the past 6 months. This price increase has several causes.

Rising energy costs

This price increase is mainly the result of rising energy costs. Due to the high energy prices, some paper mills in Europe were temporarily shut down or closed for good, as production costs exceeded sales revenues. As a result, there is a decrease in production capacity & competition, which in itself has an upward effect on paper prices. The other paper mills were forced to calculate the new energy costs in their sales prices, causing them to rise even more.

E-commerce boom

On top of the higher energy costs and lower production capacity, we are dealing with an e-commerce boom. With the general tendency to order more online with home delivery and the Covid pandemic that has brought even more online sales, the demand for cardboard and other paper shipping materials has skyrocketed.

Since the supply of products, such as food, medicines and consumer goods (think of labels, manuals and inserts, but also product packaging and boxes), as well as newspapers and schoolbooks, is disrupted, the lack of paper and cardboard will soon have major consequences for the European economy.

Finnish paper mills strike

On January 1st, 2022, 2.100 employees of UPM, the world's largest producer of graphic paper, went on strike. UPM provided approximately 21% of European graphic paper capacity and 7% of global volumes in 2021. This strike lasted almost 4 months(!) and caused a problem and disruption in the supply chain of paper and cardboard supplies in Europe.

War in Ukraine

The current war in Ukraine is not only causing energy prices to rise, but also has consequences for the supply of wood and pulp that serves as basic material for the European paper mills. Medium to long-term deliveries will continue to tighten, leading to wider paper shortages in the sector.

Both the reduction in paper capacity for the graphics sector, the reduced availability of recovered paper and the increasing competition from other sectors (such as construction and textiles) for wood fibers create uncertainty about the continuous supply of raw materials.

While the European printing industry recognizes that we all have little influence over some of these factors, there are some concrete actions that can be taken by the relevant market participants and authorities. That is why Intergraf calls for:

an immediate stop or a significant reduction in the export of pulp and paper to third countries in order to preserve the autonomy of European printing and publishing houses;
in the short term, both parties involved in the strike in the Finnish paper mills find a common solution to guarantee the availability of the necessary paper and board on the European market;
in the long term, securing European autonomy in wood, pulp and paper stocks for all economic sectors, by ensuring sufficient supplies of raw materials and production capacity in Europe.