Paper mills hike price, blame material, fuel, freight cost

By 10 Feb 2021

To add to the printer’s woes, in the last one month or so, major paper manufacturers in India and abroad have announced that they have to or will soon increase the prices of their products.

These include BILT Graphic Paper Products, Century Pulp and Paper, Belgium-based Sappi Europe, Indonesia-based Asia Pulp & Paper (APP), and Shandong Chenming Paper, among others. BILT Graphic Paper Products is increasing the price of its Indian art paper grades across the country. The rates shared by a paper trading company is Rs 63 (plus GST) in November.

In January, the rates are Rs 73 (plus GST). According to a statement issued by the company on 18 January 2021, the reason for the price rise was the “inorganic price increases in market pulps, chemicals, coal and shipping freight in the past few weeks. These price increases in raw materials have a global footprint and impacted almost every paper supplier across the globe.”

The communique added that BILT’s Unit BHU deploys 60% of imported materials plus the price increase in chemicals, coal and shipping freight will “directly impact the products’ costing.” The company added that the price of uncoated paper was reduced by approximately 30% due to lower demand.

However, the demand has surged due to “the economy being back on track” and the education sector opening up. Meanwhile, in a letter issued to its channel partners on 1 February 2021, Alok Prakash, chief sales officer, Century Pulp and Paper, said that the company is facing enormous cost pressure due to the increase in prices of the raw materials and fuel .

“Therefore, in order to maintain our quality and service, we have no choice, but to pass on a part of cost to customers in order to remain viable,” he said. Accordingly, the company has increased the prices of its virgin grade packaging boards by Rs 3,000 PMT with immediate effect. Earlier, Sappi Europe had announced that it will increase the price of its coated and uncoated woodfree paper grades by 8%-10% across Europe.

Sappi said the increase on sheets and reels will be implemented by 1 March at the latest. Beside raw material and fuel costs, APP also blamed ocean freight as one of the reasons for the price rise. “We are challenged by short availability of containers and vessels, compounded by congestion at leading posts across South Asia such as Klang, Singapore and Colombo, to name a few.

This necessitates further increase in price of USD 100/MT for woodfree varieties,” APP said in a statement. Thus, the applicable price for woodfree for sheet paper above 70 gsm for February 2021 order intake will be USD 870/MT. In a statement issued on 2 February, Shandong Chenming Paper Holdings announced that all of its board products will be increased by USD 100/MT effective immediately and another USD 100/MT rise will be affected on 20 February.

“This price increase is in response to costs hike pressure in pulp, exchange rate, chemicals and other direct materials,” the company said in a statement. The price rise will impact the company’s products such as folding box board, coated art board, cup stock, food packaging board and coated kraft back.

The same goes for the company’s paper grades as well. These include uncoated woodfree, coated art paper, copy paper, and white kraft paper.

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