The selling price of the raw materials entering into the manufacture of news-print paper has increased to a very remarkable extent during the past year. Many mills now making news-print paper are paying a very much enhanced price for the cost of raw materials which they have to purchase. Other mills purchasing the chemical and ground wood pulps entering into the manufacture of their products are operating on old contracts which expire with the calendar year. There is every indication at the present time that the price of these two commodities after January 1st, 1917 will be practically double the price which ruled a year ago, and perhaps in the case of chemical pulp three or four times the price which ruled a year ago. The mills which are forced to make news-print paper from these high priced raw materials will necessarily have to charge what would seem like an inordinate price to operate at a profit.
Consider, for example, a paper mill which is dependent on the market for its supply of raw material. Sulphite pulp, of which news-print paper contains approximately 25%, is now selling around $100.00 at the sulphite mills and the mill which converts it into news-print paper will pay $25.00 per ton of paper for this item. Ground wood, which constitutes 75% of news-print paper, is selling at $30.00 per ton F.O.B. ground wood mill, and the converting mill pays $22.50 per ton of paper for this. As it takes approximately 110 pounds of pulp to make 100 pounds of paper, this brings the total cost per ton to $52.25 for the raw materials alone. Add to this a freight rate of 12c per hundred pounds for pulp, 40% dry, and the cost per ton of raw material comes to $58.85. Add to this the manufacturing costs which, according to the Tariff Board figures in 1911 amounted to $10.14 in the United States, and a larger figure in Canada. These costs have easily increased 50% since 1911, which makes a total cost of the paper $74.06 per ton.
The majority of paper mills make one or both grades of pulp, in which case increased expenditure is dependent on the increased cost of pulpwood, coal, labor, machine clothing, repair materials, chemicals, etc., but the mills dependent on the market for raw materials have to obtain large prices to operate at a profit.
In the year 1914, the average price of news-print paper was approximately $2.00 per hundred pounds F.O.B. cars at mill. The largest producer of news-print paper in the world, is now charging for renewal of contracts $3.00 per hundred pounds F.O.B. mill or an increase of 50%. Compare this increase with the increases in the following commodities, taken from such authorities as:
R. G. Dun & Co.—“WEEKLY REVIEW”.
“THE ANNALIST”.
BRADSTREET’S.
U.S. Market Statistics (As quoted by the “N.Y. SUN”.)
Monthly Summary of U.S. Commerce.