Paper increases under wraps in Australia

As the new year draws closer, one thing seems inevitable for the printing world: paper price increases.

In the latest issue of Pulp & Paper Edge, Robert Eastment provides an analysis of the global trend and how it might impact upon Australia following discussions between mill agents and merchants.

In the US, West Linn Paper and NewPage have announced increases of up to USD60/t from the start of 2008, while rises between five to eight per cent are suggested for Europe. In comparison, Australia presents itself as a different market.

Eastment wrote that the AUD rise has managed to cover most of the mill-based cost increases overseas, and the cost pressure in raw materials has now reached a stage where the mill inputs have risen more than the value of the AUD.

While the influence of Asia may hold back price increases, Eastment believes that: "The expected consequence should be the need to pass costs through since margins have well and truly been eroded."

Eastment believes that suppliers could interfere with the process of increasing prices. "The irony is that many printers and merchants agree paper price increases in Australia and New Zealand are more than likely to be attempted in 2008, but there is a broad agreement the increases are likely to be destabilised by a handful of suppliers still placing market share before profitability," he wrote.