The paper market was already tense last year: The shortage of waste paper and the mechanical conversion of many paper producers in favour of packaging and cardboard were quickly reflected in drastic price increases.
At the beginning of the year, it looked as if prices would stabilise again - at a high level - and the situation would not escalate any further. However, new factors are now presenting the market with challenges: The strikes in Finnish paper mills, which have been ongoing since the beginning of the year, are currently exacerbating the situation enormously. Large customers have been able to secure stocks as a precautionary measure, but many smaller companies see their stocks at risk. The exact end of the strike is still uncertain, but experts are hoping for the urgently needed agreement at the beginning of April, which would lead to a significant improvement in the situation. The ongoing war in Ukraine is also having an impact on the supply of European paper manufacturers, some of whom rely on energy, virgin fibres and wood from Russia. Russian paper is no longer available, although this only accounts for an estimated 10% of the market due to inferior paper qualities.
"The coming weeks will once again be critical for the industry. High energy and diesel prices and the rising minimum wage are putting additional pressure on an already tense situation. The industry can only influence this in a few areas at the moment. However, the strike in the Nordic paper mills is exacerbating the situation immensely, and a quick agreement is essential for the price structures," explains Carsten Dietmann, Managing Director of the DDV Media Group. "In view of these converging factors, a price increase of up to €1,000 per tonne of paper is to be expected. This means that the price will be three times as high as it was recently - after this peak, however, we expect it to at least fall back to the price level we already know from 2021." The expert also believes that securing raw materials for more European autonomy in the publishing and printing industry in the longer term is fundamental to stabilising the market.
As already recommended in September, long-term planning of orders has helped printers and publishers to secure paper stocks in recent months. Customers with a stable order situation are currently experiencing little impact, with no cancellations reported to date.
But even with less long-term plans, there is no need to do without print: Publishers offer customers exciting alternative options via adverts and advertising sections in daily and weekly newspapers. Advertisements impress with their flexible planning options, short lead times and immense reach. The high credibility and wide range of possible uses also make the advertising medium attractive for customers with nationwide location structures.
Despite the dependence of advertising paper publishers on the paper market, MEDIA Central knows from intensive consultations with publishers that every effort is being made to maintain both production and distribution structures - the latter even if production is affected by a possible acute paper shortage.
Convergent media planning also provides a remedy. With a balanced media mix and the digital supplementation of print measures, advertisers can meaningfully support their reach. Based on the area, target group and local potential, MEDIA Central manages all channels available on the market for customers. Our MEDIA Central experts will be happy to answer any questions or provide advice.