navitor.com 6 Paper Allocations, pricing pressures and long lead-times continue with paper. High demand for pulp, shortages of paper making/coating chemicals, and production capacity shortages continue. The Pixelle mill shutdown (more details below) will have a large impact on liner availability and alternatives in 2023. Adhesives Hotmelt adhesives have stabilized for supply and pricing. There is upwards pressure given the volatility in oil and gas feedstocks globally. Acrylic adhesives have improved the past quarter and most allocations have been removed. Pricing is expected to be flat for Q4. Hurricane season is ongoing and can also impact the supply chain. Films Polypropylene (PP) film has stabilized and may see downward movement in Q4. Polyester (PET) has been challenged YTD but starting to stabilize. It may also see downward movement in Q4. Demand for PET liner is projected to grow in 2023 given the paper liner shortages. Packaging and Freight Ocean-bound freight rates are down significantly but still higher than pre-pandemic norms. Truckload rates have stabilized. FedEx recently announced the largest general rate increase in its history. Supply of corrugated, cores, steel drums and totes have stabilized. Paper Mill Closure - Liner Impact The Pixelle Mill in Jay, Maine, will officially close its doors. This news comes during a volatile time in the label industry where raw material shortages continue to run rampant. But paper mill closures aren’t new. Many mills have shut down over the last decade. So why is this closure different from others? The mill was a huge supplier of paper release liners in North America, and there is currently a release liner shortage. In addition, many suppliers are monitoring the ongoing starch strike. Starch is an important component to the production of paper, liner, corrugate and more. LABELS MARKET October 2022 Label demand remains high with some pockets of improvement. Paper shortages and inflation will continue into 2023, worsened by a paper mill closure impacting around 25% of the 40# SCK liner market in North America.
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