With energy costs and the cost of wood pulp raw materials soaring, major European paper producers are feeling tighter supplies of pulp raw materials and have to import pulp from further afield to ensure sufficient raw materials for production.
Russia is a major timber supplier to Europe. In Europe, Finland is the second largest pulp producer after Sweden, with nearly 10% of its wood supply coming from Russia in the past few years. But today, pulp-producing companies in Finland have to face production cuts and shutdowns. In Sweden, some pulp producers said they were raising prices and charging energy surcharges.
The reduction in the supply of wood to Europe from Russia has also limited the global pulp supply to some extent. As of September this year, the market has reduced pulp supply by nearly 1.4 million tonnes. Paper makers have also said their profit margins have also been forced to narrow due to higher pulp and energy costs.
Facing the future development of the paper industry, Santander research analyst Rafael Barcellos said that the pulp market will remain tight until the second half of 2023.
NEWS: Koehler Announces a Further 10% Thermal Paper Price Increase On Deliveries From October 2nd.
Thermal paper price still continues increasing due to many reasons. The crisis between Russia and Ukraine is causing cost increases in raw materials, logistics capacities and energy. This will affect a longer time. Paper pulp price also increased. There’s no sign that price can decrease in this year.
The Russian-Ukrainian conflict has hit the pulp market hard.
Russia is an important source of timber. Affected by the conflict between Russia and Ukraine, timber in Russia cannot be transported, resulting in a complete blockade of timber trade between countries. Pulp producers located in Europe will be hit first, such as Sweden, Norway, Denmark and other countries, whose production capacity will be curbed. Overall, pulp stocks around the world have been gradually dwindling, and supplies have been repeatedly affected by disruptions.
In addition to European countries, domestic timber supplies in Brazil have also been hit. As Brazil’s imported timber is mainly transported by sea, Brazil has recently experienced a shortage of container capacity. It is also difficult for imported wood raw materials to arrive at the port on time, which affects the normal production activities of local pulp producers.
The overall sharp decline in pulp inventories and supply shortages in this round will cause the prices of downstream paper products to rise globally.
Thermal Pricing Rising Again
The world’s leading suppliers of thermal paper have all announced more price increases. Reasons for the increase are continuously rising costs for energy, chemicals and logistics. Appvion, Koehler Paper and Kanzaki Specialty Papers have announced 7-15% price increases that will go into effect this February and April.
Appvion: 7% increase effective February 28, 2022
Kanzaki: 7% increase on direct thermal products & 10% increase on ink jet products, effective February 15, 2022
Koehler: 10-15% increase on thermal and carbonless paper, effective April 1, 2022
2020 is an extraordinary year. Now it is finally over. From beginning of 2021, thermal paper price is increasing month by month. According to the announcement for March, price has been increased by up to 15%.
In April, it’s announced that the price will increase 10% again.
Since November of 2020, the prices of softwood pulp and hardwood pulp have shown an upward trend, and international wood pulp manufacturers continue to increase their prices substantially.
In terms of transportation, due to the impact of COVID-19, the outflow of containers cannot be returned, which has led to the current tight supply of containers, rising prices, and greatly increasing the cost of maritime transportation.
Another reason: After the outbreak of the epidemic, countries have adopted quantitative easing economic stimulus policies and continued to print more money. If the amount of currency actually issued exceeds the actual value of the commodity, it will cause inflation (currency depreciation and price increase). Invisible, the price of commodities rises, and the value of currency falls. The over-issued currency of central banks will inevitably lead to an increase in raw material prices. Since it takes a certain amount of time for the super-issued currency to circulate to the market and reach the terminal, the price of raw materials only began to rise in the second half of last year, and the price of terminal commodities did not start to rise until the end of the year. This is due to the timeliness of price transmission.
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