Expensive paper puts publishers in a mess

Because paper has become significantly more expensive, Germany’s book and newspaper publishers are coming under pressure. Short-term orders for special graphic paper and cardboard for bindings have become more difficult, reports the Börsenverein des Deutschen Buchhandels, which speaks for the book publishers. No major restrictions for readers are currently expected. But: “If the paper shortage persists and the costs remain high in the long term, this could ultimately have an impact on deliverability and book prices.”

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The price increase is due to higher costs for energy and transport as well as the Corona crisis, which exacerbated the structural change: Always more paper mills are switching their production from graphic paper to cardboard boxes, which are in demand due to the booming online trade. Previously, Spiegel and Handelsblatt had reported on the higher paper prices.

According to the Fastmarkets FOEX industry index, the prices for recovered paper in Germany have risen by 78 percent since the beginning of the year Depending on the type of paper, these two raw materials play a different role: Cellulose is produced from the chemical processing of wood or wood residues. These fresh fibers are made into new paper or, with some types of paper, mixed with waste paper Here again is completely made of waste paper.

Several problems

Book publishers feel the higher costs. The Börsenverein points out that the lead time – i.e. the time for the print job including paper orders – has increased four to six times for books. “In particular, short-term reprint production is hardly possible.” Publishers would have to plan higher editions straight away, which makes the calculation more difficult.

Since the changeover to the euro about two decades ago, book prices have only “increased very moderately”. The profit margins are low. Publishing houses could not compensate for rising production costs in the long term, and prices would have to be adjusted “so as not to get into economic difficulties”.

It is getting more expensive

The Federal Association of Digital Publishers and Newspaper Publishers (BDZV) reports of “considerable pressure on prices” for press papers. Demand exceeds the amount of paper produced. Not all buyers received the agreed quantities or surcharges would be charged. The threat of undersupply is extremely problematic. “We expect that a considerable increase in the cost of raw materials, which is to be expected, will also be reflected in the price of the product in the long term.”

Arne Kant from the management consultancy Afry sees this Increases in paper prices as inevitable. “The paper manufacturers are being forced to raise prices because they are experiencing price increases for raw materials and energy, some of which have never been seen before.” The margins are low and the market for graphic paper is shrinking.

Different levels of concern

Book publishers are affected differently. The school book publisher Cornelsen reports that they are observing the situation “very carefully”. However, Cornelsen mainly prints in the first half of the year so that the books are ready for the new school year – and was therefore not as affected by the price spiral as other publishers.

CH Beck reports from higher paper prices, which “not acutely” led to price adjustments for the books, but are part of the cost-related price pressure that has lasted for a long time and is now being intensified – and “is likely to influence our medium-term pricing”, says production manager Jörg Alt.

The Munich publisher is worried about a “dramatically deteriorated Shortage of all graphic papers on the market “. Recycled paper is almost no longer available on the market and other types of paper are hardly available. “The procurement problem puts the publishers under pressure at least as much as the price problem.”

Braking consequences

The travel publisher Mairdumont (Baedeker) says: “We too are struggling on the one hand with significantly longer delivery times and on the other hand with higher costs.” However, Mairdumont is not aiming for price increases.

In 2020, the demand for paper for newspapers and advertising papers fell significantly. After all, the economy turned out less advertisements. This year the economy has picked up again – but there is not as much printing paper as needed.

Market changed anyway

The demand for printing paper fell for years, which was also due to digitization – e-paper is used more often for media consumption than before, and less is printed out in offices . In the past year, the development accelerated, as can be seen from figures from the paper industry association: The production volume of graphic paper in Germany fell by 15 percent to 6 million tons. In 2019, the minus was 8 percent, while in previous years the declines were smaller. The total minus over the past decade was 40 percent. The development is similar across Europe. Factories are being converted for a lot of money to produce cardboard instead of paper.

The situation with waste paper is difficult: It fell in Corona year 2020 among other things because of reduced newspaper thickness and canceled advertising leaflets – so there is less this year available for recycling. Roughly speaking, waste paper can be recycled ten times before it can no longer be used.

High prices, high demand – does this entice companies to get back into the production of graphic paper? Gregor Andreas Geiger from the paper industry association shakes his head: “The production capacities for graphic paper are gone. They are probably not coming back.” The structural change will continue. However, supply and demand would probably level off again in the foreseeable future. Industry expert Kant also expects a recovery – in North America and China there has already been a slight decline in pulp prices.

( kbe )