Magazine article Folio: the Magazine for Magazine Management

Your Paper Prices Aren't Going to Rise Anytime Soon: Supply Is Finally Catching Up with Demand-And That Means Stability

Magazine article Folio: the Magazine for Magazine Management

Your Paper Prices Aren't Going to Rise Anytime Soon: Supply Is Finally Catching Up with Demand-And That Means Stability

Article excerpt

Supply and demand for the coated mechanical paper used in magazines have been spiraling downward since the late 2000s, but the declines have started to level off in recent months.

Demand has suffered as magazines have cut folio sizes and frequency, downgraded paper weights and moved more assets to digital; suppliers have played catch-up by reducing capacity through shutdowns. That dynamic has played out with consistent year-over-year declines in shipments and a steady dip in prices.

Both of those trends are starting to ease up though. In April, shipments of coated mechanical paper increased for the first time in nearly two years, according to the American Forest and Paper Association, while 2014 also ended with shipments up more than 4 percent. At the same time, price hikes were announced for the end of 2014 that could put an end to a 15-percent slide over the last three years.

"Demand appears to be falling but [coated paper] mill shutdowns seem to have kept supply and demand in some kind of balance," says Maria Blondeaux, COO of Niche Media. "There are fewer mills to buy paper from and that is not a great thing for publishers."

Offerings have also shrunk as a byproduct of the capacity reductions. That's not necessarily a bad thing for publishers. It can offer opportunities to save on production costs with minimal impact on quality.

"There have been cases where our printer has discontinued paper weights and we've been able to shave some expense by making a reduction in weight or quality that's so small that none of our readers notice/' says Kollin Stagnito, CIO at B2B publisher, Stagnito Business Information. …

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