Dear Valued Customers,
As outlined in our August 6th market update the receipt paper industry continues to face cost pressure due to the critical shortage of Leuco Dye, the rising cost of wood pulp, transportation and labor.In the last few weeks we have received price increases from virtually all our supplier base. Specifically, the largest providers of thermal receipt paper have each made public market increase announcements which are effective October 1st, 2018. Each supplier has referenced these same variables as the cause for the increase.After carefully analyzing the data amidst many key variables such as the number of suppliers, the varying increase levels, and implementation dates we are announcing a price increase on several categories across our product portfolio. Due to the varying price increase amounts by product category an Direct Paper Supply Sales representative will be communicating the specific details to each customer individually.
Costs continue to escalate in the thermal market due to the Leuco dye shortage paired with drastic increases in the base sheet. Bond and multiply papers have also increase to increased demand on paper mills.All of our thermal mill suppliers have announced new price increases for all thermal paper grades. Availability is still an issue as thermal mills have convertors on allocation based on past buying patterns. Direct Paper has placed purchase orders to all of our suppliers through the third quarter of 2018 to ensure supply for our customers.
As a result of the new increases Direct Paper will be increasing prices as follows:
- All grades thermal 15%
- Bond paper 15%
- Multiply items 7%
We are daily managing the situation as market conditions evolve. Our main goal is to provide paper to our customer base and avoid lapses in product.With the holiday season quickly approaching; our highest priority continues to be ensuring adequate supply for all our existing customers. The announced increases will enable Direct Paper Supply to continue our successful product sourcing strategy which has prevented supply interruptions during these historically difficult conditions.
We are anticipating that thermal supply will tighten due to the announced reduction of imports in Q4 and the continued inconsistency of leuco dye production. Connect Chemical is producing but not at full capacity. Chameleon has yet to resume any production since the previously reported shutdown. Bond paper continues to be limited as the effects of reduced production impact the supply availability. Please note that Direct Paper Supply is confident that we have secured the necessary supply to satisfy your business and growth needs for this upcoming season.We recognize the pressure and difficulty resulting from these unprecedented market conditions and assure you that our team continues to work diligently to minimize all cost factors by reducing waste and improving efficiencies.
Lastly, we want to thank you again for your patience and partnership in what remains an ever-evolving marketplace. Your confidence in Direct Paper Supply continues to be a vital piece in managing these on-going circumstances.As always, you can also find the latest market information by contacting your Direct Paper Supply Sales Representative.We value your business and continued support in this trying market.
In a recent press release, the Office of the United States Trade Representative (USTR) stated additional tariffs at a rate of 10 percent will go into effect on September 24, 2018 followed by potential increase to 25 percent beginning January 1, 2019. The list includes 5,745 full or partial import classification lines valued at roughly $200 billion.
Due to the release of these new tariffs on Chinese imports, the impact to Direct Paper Supply will be felt among select products within the following product categories:
Thermal Paper Rolls
While we are working aggressively to minimize the impact of these tariffs, this decision by the USTR will inevitably affect customer pricing.This most recent list of items represents the third published list of goods to receive increased tariffs. Earlier this year, lists were published on July 6 and August 23 impacting roughly $50 billion worth of Chinese imports while directly impacting a variety of Direct Paper Supply products.
For the most up to the minute information as it is released by the US Government, please visit
The official press release mentioned above is
Our team of dedicated Direct Paper Supply employees, are working with our manufacturing partners to ensure our supply chain is minimally impacted. We are considering strategic options to minimize the effect of these tariffs on our customers. As we receive new information around tariff impacts, we will keep you informed.
Thank you for your business!