FIRST QUARTER OUTLOOK ON PAPER AND TRENDS

Weathering the past winter months in Chicagoland has been no easy task.? I was out there in shorts on Christmas Day in 51 degree weather; this last weekend my godson and I braved an overnight -4 in southwest Michigan, earning our cold weather camping certification for the Scouts.? In between we've had fog, high wind, rain, freezing rain, snow, and ice in varying and dizzying combinations.?

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The Year Without A Price Increase

Last fall's price push by Billerud never managed to crystallize due to a couple of market factors.? Lower print volumes combined with plenty of inventory available meant that it would be tough to push even a few dollars of hundredweight through to the bottom line.? Most mills idled or took as much downtime as made sense. Stocking the RDC became a thing of the past and merchants were conservative with stocking levels on their floor.? ?On the upside, mills were more willing to make deals on 20,000 pounds and up if you had a live order.? Prices also pulled back as imports showed strongly- all equating to a much looser market than we have been used to.

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Paper Orders Without Borders

We observed an interesting move by Lindenmeyr/CNG to bring the UPM Finesse label into their stable.? Known since the days of Xpedx for being a reliable and cost effective sheet under the alias Endurance, it adds to an impressive roster of coated offerings.? We are curious to see how they will stock and of course, where.? Meanwhile, imports keep washing up on the beach, which will continue to keep the pressure on a downward pricing direction. An unintended consequence of this could be more paper machines shuttering and moving over to linerboard/brown sending more graphics paper capacity out of the market. (Looking at you, Nine Dragons)

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Have It Your Way

With both Lindenmeyr and Midland Paper invested in in-network sheeting capabilities, the options to get custom sheet sizes and widths has expanded.? Special size and width requests will no longer put merchants in the middleman seat.? Good news for us hunting down those 20-23" rolls for inkjet.? With mills in the past charging up to $8/cwt for narrow widths and special sizes, there's plenty of opportunity to find solutions that work for both merchant and printer.? As the mills move away from the old inventory model, the ground is fertile to get custom stocking programs established that will avoid the wait for mill machine time and the challenge of dealing with freight and transportation issues.

We expect unpredictability to dominate for a good part of 2024.? We answer that with cautious optimism as we continue to solve problems and execute solutions for our clients, both new and old.? Bring it back here for Quarter 2 as we look at the impact postage increases are having on our paper spend as well as an election season preview.

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Take care out there.