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Paper prices to rise again: IndustryEdge

Tuesday, 24 April 2018
By Print21

Prices for coated paper are expected to go up at least once more during 2018, according to industry guru Tim Woods of Pulp and Paper Edge, who warns that European paper manufacturers are likely to announce another hike around July.

Tim Woods.

Writing in the latest issue of Pulp and Paper Edge, Woods said prices for most grades of paper have been in decline, but this won’t last. “The sector is about to experience what will effectively be three successive quarterly price increases, seeing average coated paper prices rise between AUD150 and AUD200 per tonne in less than a year,” he wrote. “That will still not make up for the real price declines of the last decade, but it will be a shock to buyers whose decade long experience of prices has been almost exclusively down.”

Woods blames several factors for the price hikes, including an increase in global demand; upward pressure from shipping and freight costs; and rising costs of pulp, woodchips and logs. Pulp prices are often cited by paper merchants as a key driver for price hikes – Chinese import prices for bleached hardwood and softwood kraft have risen by upwards of 50 percent since March 2016.

One factor in the pulp price has been the impact of ‘peak recovery’: developed countries like Australia and New Zealand have now reached the peak amount of paper they can recover and ship (about 75 to 80 percent), with little further increase possible. “Most of the additional fibre demand must now be met by virgin fibre pulp, without the assistance of increased supplies of recovered paper, for the first time in twenty years,” said Woods.

Spicers announced last month that it would increase prices between three to seven percent across the board from May 1, with Direct Paper and Ball and Doggett expected to follow suit. This will be the second price rise this year from Australia’s three largest paper merchants.

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