Amazon is pouring dollars into their infrastructure to at- tract workers using huge starting pays. Amid a complete shortage of paper and a large spread ransom wear attack on several large players in this industry, we also had an ex- tensive $5-billion weather event in Texas. Texas has never seen anything like this ever. That region supplies us with anything made of petroleum. The refineries supply us with glue to lick and stick a litho to a hunk of corrugated and glue to glue a box together. Paint is made of resins that come from that area. Have you seen the price of paint late- ly? This storm also knocked out many mills in the south for at least a week, right when we were going through anoth- er multi system wide shortage. This, too, put the industry into a tailspin, and we are still working hard to get out of it. What is extremely striking to me is when we can’t get simple 200-pound grades of linerboard that make up the basic box and when we can’t find heavy weight liners, IP tells many of its petroleum clients that we can’t supply them with multiwall bulk bins and that there are hardly any white grades of liner in the system. OCC (old, corrugated cartons), which used to be made from recycled linerboard, has increased in price month after month for the last six months. We have increased the export price of liner board repeatedly and we are down, year over year, 30 plus per- cent in exports of linerboard. Why dump it abroad when it is in short supply domestically? The Perfect Storm (CONT’D FROM PAGE 42)
Labor, transportation costs and basic material costs are on fire, you would think that box prices should be dou- bling. Did you know that copper is up 70 percent, iron ore is up 200 percent, and soybeans are up 55 percent? Yet, our industry’s barometer of prices, pulp, and paper claims there was very little movement up in linerboard in April (and we couldn’t even find some grades), yet we will see stronger movement up in price in May. This is now akin to Mad Magazine and its credibility is now in Alfred E. New- man, who will direct us into exhaustive research of where linerboard prices are for a multibillion-dollar industry. Holy smoking paper mill, we have another crisis on our hands now! Hundreds of contracts are based on Mad Magazine’s opinion on the movement of paper and its top research analyst is Alfred E. Newman! Yet, we are paying top dollar for linerboard at the same time our input prices are at all- time highs, and we can’t even find grades of different lin- ers to suffice our clients’ needs. These are the true factors of what’s causing box prices to rise. This is a very crucial time to look for alternatives to liner grades and combinations. Bay Cities just invested in brand spanking new ISTA test equipment that can be utilized to downgrade heavy liners when we don’t really need them. We can simulate logistical movements and warehouse storage compression via the ISTA testing protocols to proof the downgrade. This will help with eliminating scarce paper grades and potentially reduce costs, yes, I said it, CONTINUED ON PAGE 46
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www.boardconvertingnews.com
April 26, 2021
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