Paper price increases are here to stay, exec says
Paper prices just went up 14% for the packaging industry, the first increase of 2022, and the increases aren’t over yet, one paper industry executive believes.
Pinnacle Packaging President Nicole DeJoris said in a news release that users of paper packaging supplies should brace themselves for at least two more increases this year.
"Obviously, with raw materials increasing that much, it's a cascade of price increases all the way down the supply chain," DeJoris said in the release. "The recent 14% price increase is one of the largest single increases the industry has ever seen. My vendors, who have been in the packaging business for decades, say they've never seen such a big price increase."
Supply chain issues have added heat to inflating costs of raw materials, she said in the release. Demand for packaging is strong and labor market challenges have contributed to long production times for orders, she said in the release.
The demand for paper packaging supplies continues to increase despite a slowdown in COVID, and understaffing problems, due to labor market challenges also contribute to lengthy production times for orders.
The release said the PCIGroup.com has forecast that cardboard production is expected to go from 184 million tons in 2021 to 191 million tons in 2022, fueled by strong demand from online shoppers.
The consolidation and closing of paper mills also are a factor in leaving capacity short of demand, DeJoris said in the release.
"For several decades, the demand for paper and the prices had remained relatively flat. We saw a few increases here and there that didn't affect pricing in a major way, but what we've seen over the past two years is pricing for the wood pulp used to make paper has increased roughly 40 percent, which is huge," DeJoris said in the release. “And I think it'll stay there for good unless there is some new technology or more infrastructure is built to accommodate the demand."
