Growing demand for wood pulp is forecast to allow suppliers to increase prices due to rising construction activity and consumer spending
Los Angeles, CA (PRWEB) January 05, 2015
Buyers in the wood pulp market have a buyer power score of 3.4 out of 5.0, which indicates a medium level of purchasing power for buyers during the negotiation process. “Buyers have benefited from declining prices and low switching costs, which have enabled them to cut more costs,” according to IBISWorld business research analyst Jesse Chiang.
In the three years to 2014, the price of wood pulp has decreased due to declining demand from key markets. Paper providers, in particular, have struggled in recent years as demand has diminished for newspaper, magazine and other publishing markets. Demand for wood pulp has, consequently, declined, thereby forcing suppliers to decrease prices to attract potential consumers. Buyers also benefit from low switching costs due to the commoditization of wood pulp products, which vary minimally in terms of quality and functionality across suppliers. “Buyers can use low switching costs as leverage in negotiations with suppliers and, if their supplier is unwilling to negotiate, find a new supplier with little difficulty,” Chiang says.
However, this market's low level of substitutes limits buyer power somewhat. There are a number of substitutes to wood pulp, such as waste paper or inorganic fibers, but each of these alternatives alters certain qualities of the end-product. Buyers must consider the effects these alternatives have on smoothness, consistency and other factors because they can affect the marketability or usability of their end-product. Buyers should also be aware of the higher costs of these substitutes. The low viability of substitutes in the market means that buyers have few realistic alternatives to use as leverage in negotiations, which consequently lowers buyer power. Major vendors include Weyerhaeuser Company, International Paper Company, Domtar Corporation and Sappi Limited. For more information, visit IBISWorld’s Wood Pulp procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of wood pulp. Wood pulp is made when cellulose fibers are separated from impurities in wood or other materials, such as used or recycled rags, scrap paper and straw. About 90.0% of pulp production is sourced from wood and the remaining 10.0% from annual plants. This report does not include pulp produced from waste paper or other scrap products.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.