The rise in paper shortages
and what will happen in 2018?
The past few years have been a rocky ride for the paper industry, with global paper shortages causing significant price increases for many packaging companies. The main causes of these paper shortages stem from china, where many companies are struggling to get hold of the base paper needed to manufacture packaging materials such as cartons. In addition, the Chinese government are cracking down on laws and policies surrounding paper production, causing closure of many small paper mills and manufacturers.
At the start of this year, the price of Kraft paper rose by a staggering 23% between January and March, due to short supply. This sharp rise in prices hit corrugated box manufacturers hard as Kraft paper is the main material used in the manufacturing of corrugated boxes, and there is no substitute for it either. Global demand for Kraft paper has overtaken supply and the demand is showing no signs of slowing down, instead it is growing year on year.
As far as 2018 goes, experts are saying that you really need a crystal ball to see what will happen in the European paper market. Paper availability is no longer a given. With no new Kraft mills being launched up until 2021 and the current available mills running non-stop and at full capacity, right now there is no chance for the situation to improve, even if the paper supply situation improves.
Overall, although the paper market has been through some tough times, and is expected to continue to go through tough times, there is light at the end of the tunnel and despite pulp and paper shortages, there are ways of getting around these shortages and ensuring that demand is met. So fear not, we won’t all be running out of cardboard boxes tomorrow, there is still pulp and paper out there, the main issue is simply that prices are rising in the paper market as paper becomes less available.
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