How a series of unlikely events may lead to a truly stinky outcome
While it is true that more and more of the publishing world is moving away from paper, it is also true that print remains a significant and powerful medium. And as alluded to, print requires paper. Which brings us to this remarkable tale of unlikely events.
Not so long ago, before the word tariff gained such notoriety, a paper mill in the great northwest of the United States brought suit against one of its prime competitors in the newsprint market, claiming that the Canadian company was enjoying unfair advantage due to subsidies from their national government. This in and of itself is not a rare event, but the outcome of the suit, that the Canadian mill was indeed at fault, was unexpected.
Meanwhile in China, the government took stock of the paper recycling industry — a primary source of paper in China — and decided that the chemicals used were detrimental to the environment. Again, an occurrence at odds with historical norms. The result being that China moved into the wet pulp market in a big way.
Canadian newsprint mills, generally annoyed with the lawsuit decision looked at the new Chinese market and found that the expense of shipping to China actually cost less via boat than shipping to the United States via truck and train, and they decided to sell virtually all their pulp to the far east. Great for China, great for Canada, bad for newsprint buyers in the United States.
Meanwhile in Siberia (yes, Siberia!) - perhaps due to the historic rise of anthropomorphic climate change or maybe it was just a fluke of nature — temperatures were extremely warm all winter long in 2017- 18. So warm in fact, that the ground did not freeze and trucks and loggers were not able to harvest lumber for paper pulp, which in turn caused a huge shortage of paper pulp on the International market. This at the same time that China decided to buy more fresh pulp ... which caused an even tighter market.
Back in the United States, buyers of newsprint took note of the situation and started buying in bulk to ensure that they had sufficient supplies. Which put pressure on an already tight market, driving prices much higher. And some companies that ordinarily bought newsprint decided to move to a heavier weight and higher grade of paper, which caused a chain reaction of companies jumping grades and driving prices higher.
So for paper in general, there have been price hikes in recent months, and another for September of $2.00 per hundredweight is in the offing. As with most commodities, these increased prices will likely lead to increased production, and prices will probably moderate in months to come. But for now, our margin suffers.
While I can almost hear some online-only publishers sniggering at traditional print publishers in the fold, I can only say this. I hope that you are not parents of very young children. Because as you know, disposable diapers are also a product made from pulp. And so the unlikely sequence of events described above will also increase the price of baby poop management. A stinky mess indeed.
Rob Johnstone is the publisher of Woodworker's Journal, the director of content marketing at Rockler Press and a current MMPA board member.