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Paper prices plummet in decade – Pulp & Paper Edge

Tuesday, 19 August 2014
By Print 21 Online Article
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Even as paper volumes are stable or growing the prices being paid for Australia’s printing and communication papers are in free fall. Recent upwards movements reflect only the impact of the depreciation of the Australian dollar.

On a searching examination of the growth of the Australian Balance of Trade Deficit in Communication Paper, industry bible, Pulp & Paper Edge, suggests that only where there is local manufacturing are prices stable.  TIm Woods, publisher writes that, regardless of where you stand in the trade, there is not a lot to enjoy when we lift the veil on Australia’s troubled balanced of trade deficit for printing and communication papers. [There are]no winners in expanding deficit.

The survey comes at a time when estimates to the end of 2017 are that consumption of printing and communication paper in North America will decline at an average rate of 4.1% per annum and by 2.5% in Western Europe. Growth in Asia (inclusive of the mature Japan and Australian and New Zealand markets) is forecast to be 1.5%, with the rest of the world averaging 1.8%.

P&PE addresses concerns about the lack of local production to act as a balance against a purely price-driven import mechanism.  It maintains that a healthy paper price is good for all sectors.

'A healthy market includes a robust interplay between domestic production and imported supply.' Tim Woods

Underscoring the importance of domestic production, import prices for … light-weight coated or LWC mechanicals, which are used in catalogues and many magazine applications, have experienced the biggest real price decline over the last decade. Importers have routinely expressed the view that Norske Skog’s Vantage product may well reintroduce differentiations into the market that will result in improved prices for quality products and services.

The statistics indicate just how different areas of printing and publishing are doing. While imports of uncoated mechanical grade for printing directories and lower grades of catalogues fell by 9.2%, imports of coated woodfree papers for publications and higher grade magazines increased by 5.3% to 293.4 kt.

 Tim Woods writes … A healthy market includes a robust interplay between domestic production and imported supply. Both bring different features that can add value built on dynamics including global innovation and local market services. On their own, each is destined, and the foregoing evidence shows this, to compete on price alone.  When that occurs, all value is ultimately left with the buyer. That is in no one’s interest.

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