Paper makers to hike prices

Paper mills in India and around the world are feeling the impact of “significant uncertainties''. This includes the war in Ukraine, the ongoing impact of the Covid-19 pandemic, and commodities like market pulps, crude, coal, furnace oil (energy costs), chemicals and shipping freights which have "skyrocketed at rates unseen in a decade or more."

01 Aug 2022 | By Charmiane Alexander

Bilt Graphic Paper Products has intimated its customers about a hike in paper prices. A notification issued on 21 July says, "We shall apply +3,000 Rs/MT on all grades + 1000 Rs/MT in addition to Rs 3000 PMT in 60 to 80 gsm Supernova HB and + 10,000 Rs/MT on special grade papers." The increase is applicable with immediate effect from 21 July on all fresh bookings for September 2022 deliveries.

The reasons attributed for the paper hike are "unprecedented pressure on supply chains, spiralling shipping costs, soaring energy prices and security-of-supply concerns due to the uneven economic rebound and the release of pent-up demand after the pandemic and the current geopolitical situation."

Paper experts who spoke to PrintWeek said, "For the last four-six months, we are noticing persistent new highs in these commodities. Needless to say, these are fundamental inputs and such inorganic rise in these commodities would lead to increase in the prices of globally traded commodities like pulp and paper."

Furthermore, the depreciation of INR (from 75.5 to 80 INR to a USD in the last 100 days) has resulted in a steep cost increase for all imported raw materials, especially for Unit Bhigwan, which uses approx. 65% (by value) of imported raw materials.

In addition to Bilt Graphic Paper Products, Bielefeld-based speciality paper manufacturer Mitsubishi HiTec Paper is forced to implement a further price increase due to renewed cost increases in chemicals, energy, freight and pulp. For deliveries from 1 September 2022, prices for the entire range of coated speciality papers (Thermoscript, Jetscript, Giroform, Supercote, Barricote) will increase by up to 15% worldwide.

Meanwhile, Stora Enso’s share price fell by nearly 10% after the group missed analysts’ earnings expectations – despite achieving its best quarterly results since the early 2000s, including a big improvement in performance at its remaining paper operation.

In March, Stora announced that it planned to divest four of its remaining five paper mills. The group also closed its Veitsiluoto mill in Finland and the Kvarnsveden site in Sweden during Q3 2021.

The shift in the group’s focus and massive restructuring programme is evident in the production figures. Stora Enso manufactured 526,000 tonnes of paper in Q2, 29% lower than the same period in 2021 when it made 741,000 tonnes, while deliveries were down nearly 33% at 517,000 tonnes.

UPM has reported record Q2 profits “driven by successful margin management in exceptionally tight markets”.

At Communication Papers, UPM said that significantly higher sales prices had “more than offset” the negative impact of higher variable costs.

UPM delivered 2.11m tonnes of paper in the period, compared with 2.89m tonnes in 2021.

At self-adhesive labels unit UPM Raflatac, selling prices were higher in Q2 compared with the prior year, but delivery volumes were lower. EBIT was up in Q1, which was affected by a provision for expected credit losses at its Russian business, where sales have been discontinued.