Paper Shortage and Price Increases

From Pulp & Paper, Oct 23.

Label paper makers and converters warned customers to expect tight supplies and a spike in prices due to the temporary shut for environmental reasons of chemical supplier Connect Chemicals’ plant in China, which is the world’s largest producer of leuco dye, an essential component of thermal paper coating. The plant, which supplies about 50% of worldwide demand and 80-85% of the Asian market, is expected to stay shut for at least three months.

US price increases of 6-7% on thermal and carbonless paper were already in play in September, and the major US seller of thermal paper to end users, Iconex, plans another 8% increase effective with October deliveries. Texas-based TST/Impreso, which had previously announced a mid-October hike, told customers Oct. 6 that “quickly escalating prices and supply limitations may result in increases larger than originally anticipated.” The firm warned buyers to expect “an overnight worldwide shortage of thermal paper, and an accompanied escalated increase in price.” It limited customers to their historical monthly usage, citing mill deliveries that are “already three weeks off original projections.”

RiteMade Paper Converters, which converts paper rolls into thermal receipt paper at plants in Kansas City, KS, Ashland, VA, and Reno, NV, also put its thermal paper customers on allocation and warned them to expect additional price increases before the end of the year. “A thermal paper shortage is very real and could last until ntid-2018,” RiteMade said.