Paper Industry Commentary
June 2020


How do we know that the supply-demand theory isn’t reliable when put in practice in pulp and paper? If prices were really determined by marginal producers’ cost levels, market prices would always be at that level. When costs went up, prices would rise; when marginal producers’ costs went down, prices would fall. The implication of this is that the margins of marginal producers would always be approximately the same. But they aren’t.


Now that the initial surges seem to be over, we’re able to look at how recent consumer habits have altered the tissue and towel industry and look ahead to what the sector could look like in the coming months.
To help answer the questions looming over the spotlight segment of the pulp and paper industry, we picked the brain of Fisher International’s foremost expert on tissue and tissue and towel – senior consultant  Bruce Janda  ( bjanda@fisheri.com ).


Quality data is fundamental for pulp and paper professionals when it comes to gleaning information about competitors, customers, and the marketplace, but how it is utilized in analyses and decision-making makes it transformational to a business’ success. And, while decisions made based more on intuition and judgement do not necessarily lead to disaster, they do leave money on the table in the form of less-than-ideal pricing, lost sales, and other missed opportunities.


As for the paper industry in China, it didn’t see much damage from the coronavirus outbreak. Total exports of paper in April increased because of fulfillment of previous overseas orders from before COVID-19. With the pandemic greatly recovering, the focus of Chinese paper industry is back to two key areas of reform that could create opportunities for overseas finished paper products and the wood/pulp supply chain.


"The forest supply chain has every reason to be hopeful about the future, as well as some of the new, exciting opportunities that are poised to develop in the future," Stewart said. "The forest industry is subject to some of the vulnerabilities that come with being global in nature, but its supply chains are stable, its markets are entrenched, and demand for forest raw materials is very strong."


Millennials are changing the way we look at the world in many ways—including how we package the food and beverages we eat and drink every day. The EcoFocus Worldwide 2019 U.S. Trends Survey shows millennials place a much higher value on sustainability than previous generations and packaging is no exception.


“Packaging is receiving more attention than ever as society tries to achieve a more circular economy," said Jonathan Tame of Two Sides Europe, Inc. “Consumers are becoming more aware of available packaging choices for the items they buy, which in turn is influencing packaging decisions by businesses – particularly in the retail sector. The culture of ‘make, use, dispose’ is gradually changing."
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