Posted on 21st March 2022
by Ben Crossfield
The UK paper market has traditionally been very stable, there are typically just one or two increases in the price of raw materials a year, each implemented after a few weeks of notice. Yet over the last 12 months there has been an unprecedented number of price increases and extreme volatility in the market, with paper merchants citing the cause as “pressure on energy and production costs”.
Since May 2021 we have received nine separate paper price increases from two of the UKs largest paper merchants. Each increase has added 5-20% to raw material costs, with the average across all papers and boards being 10-15%. In a change to the norm, most of these increases came into effect within seven days and some of the later increases have even been applied without notice.
Unfortunately the situation is not expected to improve any time soon, with further price increases expected in both April and May.
Beyond increasing prices, there are ongoing supply issues for certain types of paper and label materials! This issue has been triggered by ongoing strike action at the UPM paper mills in Finland, which began on 1st January 2022. As the largest mills in Europe, this development has been felt all the way down the supply chain, affecting our domestic market, even though the UK is no longer part of the EU.
Industry trade associations are joining forces in calling for an end to the industrial disputes, before it has serious ramifications on supplies for the food, drink and pharmaceutical sectors in particular. There is also a concern that time-sensitive printed matter could be impacted, such as newspapers, magazine, books and advertising.
We are currently seeing much longer lead times on label materials, with some of our larger orders not expected to be delivered for up to five months. We’ll keep sharing the latest developments.
We’re advising clients to bring forward their orders for business critical print, i.e. printed items that enable you to keep the wheels of your business turning! This could be business stationery, product catalogues, labels used in your production facilities, or something else. This time gives us some contingency against raw materials taking longer to arrive. As soon as we receive orders, we’ll get projects booked in and keep you updated on their progress.
With raw material prices set to increase further, you may want to consider ‘doubling up’ on your orders, i.e. ordering twice the quantity you would normally order to secure current market rates. As well as giving you the peace of mind that you’ll be far less likely to run out of the printed items that you rely on, you may well access a better unit rate, due to economies of scale. Your order quantities don’t need to be dictated by the size of your stationery cupboard as we can carefully store your printed items in our secure warehouses. You then call-off your printed stock, as and when you need it. This approach is particularly effective if you have multiple sites or branches, and costs can even be charged to different cost centres.
We’re keeping our quotes as cost effective as we can for you. That may mean that we need to deviate from our normal terms and conditions, with our quotes valid for a shorter period of time than normal. If that is something we need to do, our quotes and Account Managers will clearly confirm the approach we’ve taken.
We’re always happy to meet up, or chat on the video conferencing platform of your choice. We’ll look at your unique situation and do our best to guide you through the current volatility in the print market. Our aim is to maximise your efficiency and minimise any hassle! Here’s a reminder of how to reach our team.