According to global investment financial giant Deutsche Bank, publication paper prices in the U.S. are finally beginning to drop after months of increases across North America. Prices of coated freesheet, newsprint, coated groundwood, and supercalendered papers were all down in December.
Deutsche Bank analyst Mark Wilde stated, "With consumption likely to remain weak and the U.S. dollar rising (increasing threat from imports), producers will remain at battle stations through 2009." The report also noted that demand for coated papers is falling due to a weak advertising market for magazines, and decreasing catalogue circulation.
But just because prices are declining in the U.S. doesn’t necessarily mean the same thing will happen in Canada, sources from the paper industry said. The Canadian dollar is still weak, and U.S. mills selling paper in Canada are netting fewer profits as a result. Paper prices shoot up when the dollar goes down, and distributors often have no other option than to pass on the price hikes to the customer.
One industry insider even said there are rumours more price hikes are coming in the next weeks of January. Stay tuned.