Office paper prices show no sign of heading down after buyers on Purchasingdata.com reported paying an average record-high price of $1,100/net ton for cut-size office paper in March. This price is 38% higher than what buyers were paying in January 2006.

“The magnitude of the price increase is larger and, importantly, the timing of the announcement comes earlier than we had been expecting,” says analyst Claudia Shank Hueston at J.P. Morgan Securities in New York.

Paper producers blame mill machine shutdowns as well as the weak U.S. dollar and tepid imports for the price hikes on their end.

In mid-February paper producer Domtar pushed a $60/ton price increase on its cut-size uncoated free sheet, a move that surprised some market analysts as the increase was larger than expected. Other paper producers, such as Boise Cascade, International Paper and Georgia-Pacific followed suit with $60/ton increases soon after Domtar's announcement.

Linerboard prices are creeping upwards as well—just in March major linerboard mills including Smurfit-Stone Container and International Paper and Weyerhauser announced $50/ton containerboard price hikes. Meanwhile Marubeni Pulp & Paper North America, Alberta-Pacifica and AbitibiBowater all said they wanted to increase northern bleached hardwood kraft (NBHK) pulp prices by $30/metric ton for April deliveries. Linerboard price hikes poise buyer price averages to top $600/ton—another record high—while NBHK pulp will likely top $835/metric ton.