Paper prices have climbed significantly over the past several years, driven by a combination of mill closures, rising production costs, and a fundamental shift in what the paper industry chooses to make. A ream of copy paper that cost $5 a few years ago now regularly sells for $8 to $12, and specialty papers have seen even steeper increases. The reasons go well beyond simple inflation.
Fewer Mills Making Less Paper
The single biggest factor behind expensive paper is that the industry is permanently shrinking its capacity to produce it. Printing and writing paper capacity in the U.S. fell 6.9% in 2024 alone, the steepest annual decline since the pandemic-era drop of 14.9% in 2021. Mills that once made the paper you’d buy at an office supply store are either closing for good or being converted to produce packaging materials instead.
The closure wave hitting in 2025 is massive. International Paper is shutting down three major facilities: an 800,000-ton mill in Louisiana, a 1-million-ton mill in Savannah, Georgia, and a 430,000-ton mill in Riceboro, Georgia. Packaging Corporation of America is cutting 250,000 tons of capacity in Washington state. A newsprint mill in Ontario that produced 220,000 metric tons annually has been idled. These aren’t temporary shutdowns. They’re permanent, affecting thousands of workers and removing millions of tons of production from the market.
The strategy behind this is deliberate. International Paper’s CEO has described it as focusing on the 20% of assets that drive 80% of value. In practice, that means closing older, less profitable mills rather than keeping them running at a loss. When supply drops and demand holds relatively steady, prices rise.
The Industry Is Choosing Packaging Over Paper
Much of the paper industry’s investment is flowing toward cardboard and packaging, not the printing and writing grades consumers buy. According to the American Forest & Paper Association, four new containerboard machines came online in 2023, and additional boxboard machines started up in 2024. At least one of those boxboard machines was directly converted from a printing-and-writing paper line.
This shift makes financial sense for manufacturers. E-commerce has created enormous demand for corrugated boxes and shipping materials, while demand for office paper and newsprint has been declining for over a decade. Mills follow the money, which means fewer machines producing the paper you’d use in a printer or notebook. The result is a tighter market for graphic paper, with less competition among producers and more pricing power for the mills that remain.
What It Costs to Make a Ton of Paper
Even at mills still producing paper, the cost of making it has gone up across nearly every input. Four factors drive most of the price movement: the cost of wood pulp (the raw fiber), energy to power the mill, freight to move the product, and currency exchange rates for internationally traded paper.
Wood pulp is the foundation. Making a ton of pulp from virgin wood requires roughly 3.5 tons of harvested timber, so even modest increases in logging, transportation, or processing costs get amplified. The U.S. Producer Price Index for wood pulp sat at about 140 in early 2026, still well above historical norms despite easing slightly from a peak near 145 in early 2024. That index has roughly 40% higher than its 2006 baseline, reflecting years of accumulated cost pressure.
Recycled fiber, which you might expect to be a cheaper alternative, is surprisingly volatile. The cost of old corrugated containers (the most common recycled input) has swung wildly over the past eight years, ranging from $27 per ton of pulp produced to $180 per ton. Virgin wood fiber has been more stable by comparison, but that stability comes at a consistently high price. Mills can’t simply switch to recycled paper to cut costs when the recycled market can spike unpredictably.
Energy and Freight Add Up Fast
Papermaking is energy-intensive. Mills use enormous amounts of heat and electricity to cook wood chips into pulp, press water out of the fiber mat, and dry the finished sheets on heated rollers. European producers have been hit especially hard, with the Confederation of European Paper Industries citing high energy and manufacturing costs as a major drag on competitiveness compared to global rivals. That pressure feeds directly into the price of paper sold in Western markets.
Freight costs layer on top. Moving paper from mill to warehouse involves ocean shipping rates, port handling fees, fuel surcharges, and inland trucking on both ends. A real-world example from the kraft paper market illustrates how quickly these add up: a shipment quoted at $580 per ton from Shanghai looks affordable until you add $85 per ton for ocean freight, $12 for port handling, and $8 for local delivery, bringing the true cost to $685 per ton. That’s a 18% markup just from logistics. For domestically produced paper, trucking from mill to distribution center and then to retail stores adds a smaller but still meaningful layer of cost, especially when diesel prices are elevated.
Labor Costs Have Jumped
Running a paper mill requires specialized operators, and those workers have become more expensive. Bureau of Labor Statistics data shows unit labor costs in paper manufacturing rose 10.5% in one recent year and 9.5% the following year, far outpacing general wage growth. The industry competes for skilled workers with other manufacturing sectors, and the physical demands and shift schedules of mill work mean employers have had to raise pay to retain staff. With fewer mills operating, you might expect labor costs to matter less, but remaining facilities are running harder and need experienced operators to maintain output quality.
Weak Demand Hasn’t Lowered Prices
Here’s the counterintuitive part: overall demand for paper has actually been falling. European paper manufacturers report that insufficient demand remains a significant limiting factor on production. The general production trend across European mills has been negative since 2021. You’d normally expect falling demand to push prices down, but the industry has responded by closing capacity even faster than demand has dropped. Producers would rather run fewer mills at high utilization rates (and higher margins) than keep marginal facilities open to chase volume.
This dynamic is why paper prices can stay elevated even when you’re printing less and offices are going increasingly digital. The supply side is contracting faster than the demand side, keeping the market tight enough to support higher prices.
What This Means for Everyday Buyers
If you’re buying copy paper, notebooks, or printing stock, the price increases you’ve noticed reflect structural changes in the industry, not temporary disruptions. Mills aren’t coming back online. Converted machines aren’t switching back to printing paper. The economics favor packaging, and the companies that still produce graphic paper have less incentive to compete aggressively on price when there are fewer alternatives for buyers.
Recycled paper products aren’t necessarily cheaper, because the cost of collecting and processing recovered fiber fluctuates dramatically. Buying in bulk when prices dip, switching to lighter-weight paper stocks, or reducing print volumes where possible are the most practical ways to manage costs. For businesses that use large volumes, locking in contract pricing with a supplier can provide some insulation from the spot market swings that hit smaller buyers hardest.