World Paper and Printing Markets
Global Markets
All markets are local; all markets are global.
This is really a shorthand way of saying that freight cost is an important component of printing paper sales but can be swamped by larger supply and demand issues when the market is sufficiently unbalanced – or when buyers or sellers are determined enough.
It might not seem logical for newsprint to be exported in big quantities from North America to Europe, Latin America and Asia, but in fact North America has a role in the future as a surge supplier to all of these regions.
And looking purely at newsprint shipments within North America, most newsprint consumed within the western part of the continent is produced in that region, but a small fraction comes in from east of the Rockies – in spite of an incremental freight cost for such shipments that can easily subtract 3% to 5% from the supplier’s margin on the sale.
In a theoretically pure commodity market, the buyer would pay for freight, forcing supply/demand relationships into freight-logical patterns. But as buyers and sellers alike know, there often isn’t anything logical about newsprint.