Facing Today’s Manufacturing Woes
The overall message, however, is clear: The mills want to keep hiking prices to compensate for the increases in their own costs, and they are not letting low demand dictate price policy. What they don’t get in July, they may well try for in October.
The wise paper buyer needs to understand that the mills are driven by two loud voices in their ears. First, the rising costs of energy and transportation are affecting mills, and price increases are necessary just to tread water. Second, strict profit goals are in place at all mills today, with the sternest tests at those held by private equity investors. The days of waiting out a market downturn or sharing a customer’s burden are over. If you can’t make money selling paper today, you shut down the mill and take your capital elsewhere. The lost jobs and lost customers don’t have a place in the equation.
