Weak Demand Will Mean Higher Paper Prices

Decreasing demand for publication papers in the U.S. is apparently having a counterintuitive result: higher prices. Or, at the least, higher minimum price levels during down markets.

There’s a logical explanation, and it doesn’t involve repealing the law of supply and demand. Nor does it mean that paper companies will be especially profitable in the future.

 “Newsprint will never fall below $500/tonne again, and will probably spend little time below $600/tone,” Verle Sutton wrote in the April issue of The Reel Time Report. “Average coated groundwood prices [for 40# #5] may drop below $800/ton in 2012, but will not get close to the 2009 low point of $730/ton. In fact, the current cyclical decline might be the last one in which coated groundwood pricing falls below $800/ton.”

Sutton is no optimist about the paper industry. He questions whether recently announced price increases for coated paper will stick and is especially bearish about the industry’s long-term prospects, as discussed in Why Coated Paper Prices Look Ready for a Fall.

The phenomenon Sutton describes – higher pricing “floors” for publication papers in future down markets -- is actually the result of the gloomy outlook for publication papers. It's somewhat akin to predictions that printed magazines will continue to exist for the foreseeable future, but as luxury items with much higher price points than today.

Folio: Magazine Honors Donahoe As Innovator

Postmaster General Patrick Donahoe was named today to Folio: magazine's "2012 Folio: 40" list of the magazine industry's "most innovative and distinguished professionals."

The Donahoe article, published online today and to appear in an upcoming issue of the magazine, cited Donahoe's "continued commitment to magazine media, while also remaining steadfast on the realities surrounding the challenges the USPS is combating."

Donahoe has reassured publishers that the U.S. Postal Service won't try to solve its financial problems by jacking up their postage rates, the article said. He's trying instead to cut costs, it added, by reducing the number of employees and postal facilities and by eliminating Saturday delivery.

FSS Machines Running Far Slower Than Planned

Flats Sequencing System machines continue to run much slower than their target speeds and aren't getting any faster. But they also aren't breaking down as often as they were last year, according to a Postal Service presentation.

From October through mid-February, the average number of pieces sequenced hourly ranged from 7,000 to 10,000 per week, well below the target of nearly 12,000. Throughputs so far this year have stabilized in the range of 8,000 to 9,000 per hour with a slightly downward trend, according to a presentation Megan J. Brennan, USPS's Chief Operation Officer, made at a recent Mailers Technical Advisory Committee (MTAC) meeting.

But the "Mean Time Between Failure", a measure of how frequently the machines break down that was at about 10 for most of August and September, has been consistently above 13 recently. And the time it took to get a machine back online dropped by about one-third in a six-month period.

Here's Why We Avoid Four-Color Body Type

Thank you, The Wall Street Journal. You did me and a whole lot of other production managers a huge favor today with your printing foul-up.

Every couple of years, it seems, I have to talk an editor out of going along with a designer's proposal to jazz up a publication by getting rid of boring old black body type in articles. "Ooh, purple would look nice."

It was hard enough way back in the 20th Century to explain why printing 8-point type with four colors of ink would create an illegible mess. At least then most editors and designers had some clue about how printing worked.

Nowadays, you're likely to be dealing with someone who cut his teeth on the web and can't fathom why what he sees on his monitor can't look exactly the same when printed. ("I don't want four colors; I only want purple!" "Well, if the printer can't make the colors register exactly, get another printer.")

Now I have my evidence.