THE GLOBAL PAPER MARKET
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Question: Why are paper prices so high?
Answer: Inevitably, supply and demand. In the late 1980s and early 1990s, paper prices were significantly lower - the result of excess capacity and muted demand from customers. Most paper manufacturers lost money. Last year demand began to improve in North America and Europe, but supply did not keep pace. At the same time, the fast-growing Asian econ-omies were buying paper in vast quantities. - enough to convince manufacturers to divert supply from markets in North America and Europe. Now there is just not enough paper to satisfy everyone.
Question: So why don't the manufacturers make more?
Answer: It takes a year to 18 months to bring new capacity in newsprint and other paper grades on stream. Leading companies are indeed planning to add capacity, but the new product will not be available for many months.At the same time, some manufacturers are hesitating: they don't want to build capacity just in time for an economic slowdown and a decline in demand. That is how they got into trouble in the last downturn.
Question: When are prices likely to fall?
Answer: Most analysts expect the tight market to persist well into 1996. On past form, the industry will then find itself with too much product and prices will drop.
Question: Isn't there some way to smooth out the cycles? Why don't customers and suppliers co-operate?
Answer: Tradition. Previously big buyers of paper squeezed their suppliers mercilessly. As markets tightened, suppliers gave back as they received.
Question: Why is there so much demand for paper anyway? Weren't we supposed to be moving toward the paperless office? And what about electronic information systems?
Answer: The paperless office is a myth. We may use computers, but we still like to print out our work. We also fax material, producing two lots of the same document at a stroke. As for electronic information: yes, up to a point. But we won't be reading our news on a computer screen while going to work on the Tube just yet.
MATHEW HORSMAN
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments