Raw material costs continue to rise due to supply chain issues and the COVID-19 pandemic. Demand is high, and supply is still catching up. The material that’s critical to transactional print and mail that’s most in flux is paper. Paper prices increased 6-15% in 2021, so what does the future hold for paper market trends?
What the Experts Say About Paper Market Projections for 2022
The expected amount of paper production globally in 2022 is 416mn tons. That number is lower than the peak of 2018 but greater than 2021. The catch-up is the result of Asia catching up with output lag. According to experts, North America could fully recover in 2022, adding +3mn tons.
Currently, China is the largest producer of pulp and paper, followed by the U.S.
Regarding printing paper, the output is declining. The output market share for this class was 31% in 2015, compared to 26% in 2019. That decrease is in part due to digitization and less printing as well as remote working. However, the analysis doesn’t mention any falloffs in print and mail.
Pulp Prices Still Trending Up
The core raw material for paper is pulp. Its costs increased sharply in 2021, and 2022 projections show a slight decrease. In September 2021, European pulp was up by 53%, and Asian pulp rose by 47%.
Pulp price increases hit the paper market hard. The good news is that it’s not suffering from labor shortages or significant equipment shortages.
Paper Market Trends: The Year Ahead
According to the data, production is catching up, but costs remain higher than pre-pandemic. The scarcity of products also appears to be leveling out. Except there are still many unknowns about 2022 regarding the newest variant of the COVID-19 virus and how it might disrupt production and supply chains.
So, what else is making the paper market so volatile? And how does that impact transactional print and mail?