Price Increases On The Horizon?
There are a number of market forces that are currently impacting the label manufacturing and converting industries. The two words that nobody wants to hear, yet everybody wants to know about as soon as possible, are on everyone’s lips -- “price increase.”
If you follow the Pulp Index, you know that the producer price index for wood pulp, after years of stagnant or slowly declining prices, is now on the rise.
The reductions in capacity as a result of paper mill closures across the US are creating supply pressures across multiple industries, even as the global demand for thermal paper is increasing.
One of the world’s largest suppliers of leuco dye, an essential component used to make direct thermal coating, has been closed until further notice due to environmental issues. This shortage of leuco dye has already caused at least one major thermal paper mill to significantly reduce their output, and a thermal paper shortage could last through 2018.
As a result of these and other pressures impacting the market, our suppliers are beginning to tell us to expect price increases before the end of the year. It is likely that some announced price increases will be effective immediately. Material prices are the largest component of the overall cost of a label, so these increases will likely be felt throughout the entire supply chain, down to the consumer.
General Data is actively monitoring the situation and working to offset these price increases so as to minimize their impact on our customers. We will continue to provide updates as additional information becomes available. We also suggest that you get any pending orders in to us as soon as possible to avoid any potential price increases.
In addition, keep in mind that General Data’s broad product line of label materials means that you will have many alternate product options available to you in the event that a particular face stock is hit with a significant price increase. Your General Data account manager will help you explore all the different available options so you can choose the best fit for your application and budget.
If you have any questions on any of this information, your General Data account manager is available and always happy to help.