Producer Price Index: Paper in the US - Data and Analysis (1980-2032)

In 2026, the price of paper is forecast to rise by 3.4%, reaching 263.6, as past mill closures and elevated energy costs tighten supply and raise input costs. The price increase will be partly driven by mill closures undertaken in previous years to rationalize costs and retool operations toward alternative packaging grades, which have reduced effective capacity in traditional paper segments and left the market structurally tighter entering 2026. Because of this, producers face stronger demand pressures on a smaller supply base, amplifying pricing power and encouraging upward adjustments to preserve their profit. At the same time, heightened energy price volatility linked to the ongoing Iran-related conflict has increased the cost of a core input in paper manufacturing, compounding existing frictions along the cost structure. These dual pressures—constrained supply capacity and more expensive energy—are expected to translate into broad-based input cost escalation across the industry over the year. Over the five years leading to 2026, the paper industry has been shaped by several critical factors, resulting in a CAGR of 4.2%. A key driver has been the economic resurgence following the lifting of COVID-19 restrictions, which brought about increased industrial activity and a revival in demand for paper products. This was paralleled by geopolitical factors, notably the conflict in Ukraine, which disrupted global supply chains and significantly increased energy costs, particularly for natural gas, a vital input in paper production. This escalation in energy prices has had a direct impact on production costs, elevating the overall expense of manufacturing paper products. Also, an emerging demand for more sustainable paper products, such as those used in packaging, has also escalated. Products like paper cups and straws, which often use recycled materials, have seen increased demand, with recycled paper pulp becoming a sought-after commodity. However, the price of pulp has risen because of ongoing production challenges and the increased energy costs previously mentioned. As a result, these intertwined elements—rising energy costs, demand for sustainable products and supply chain disruptions—have collectively driven the increase in paper prices, positioning the industry to navigate these complex challenges over the coming years.