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bakırköy escortbahçeşehir escortşişli escort Coronavirus outbreak dips approx 20 percent Indian Kraft Paper export sales; FBB & Cup stock may get a hike in ‘Export’ || The Pulp and Paper Times

Coronavirus outbreak dips approx 20 percent Indian Kraft Paper export sales; FBB & Cup stock may get a hike in ‘Export’

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Find the news related to the Coronavirus outbreak in China and its impact on paper export in India

Coronavirus outbreak dips approx 20 percent Indian Kraft Paper export sales; FBB & Cup stock may get a hike in ‘Export’

Ghaziabad | 18 February 2020 | The Pulp and Paper Times:

The coronavirus outbreak in China has brought India’s Kraft paper industry to a semi-standstill with both production and logistics slowing down. As per our industry sources – the temporary impact is in the decline of sales of around INR 50 crores of Fluting Medium & Test Liners from India to China. This has resulted to a certain extent of delay in receiving the payments as well as the Banks remained closed till 10th Feb. However, the corrugators in China believe the things will get normalize by Mid of March.

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“We haven’t received the payment of January shipments yet and there is no new order in hand for February month. There has been decline of INR 40 to 50 Crore in the sales for Gujarat and Maharashtra region only. Overall, if we estimate, there has been declined of 20 percent in export sales from India. The major impact of Corona outbreak is that Indian prices have crashed. The Prices were upward in December 2019 or January 1st week but due to stopping of China’s buying price has again come down,” explained by Mr. Dipesh Laddha, Director at Kalpataru Papers LLP.

The market of China is completely shut down which has impacted our export sales however we have compensated our decline in export through domestic sales and other overseas markets. Our 10 percent export sales revenue has been totally subtracted due to corona virus, there is no new inquiry and this situation will continue till March,” Said Mr. Hardik Patel, Director, Om Sree Papertek Pvt. Ltd. situated at Hyderabad, Telangana.   

“There is a severe shortage of containers which is seen now in the major ports of India – and the shipping Ocean Freight has gone up by 4 to 5 times to what was offered in January till 15th of the same. During the Lunar Year generally the traffic of cargo in Asian region is moderate but this time due to the shortage of containers & the rush to export from neighbouring countries of China – the short gap has resulted into escalation of Ocean Freight for all the exporters,” Mr. Laddha said.

Our Export sales to China have significantly dropped by coronavirus. We see an approximately 50% decline in our export. There are no orders despite our conversation with concerned buyers. We have been continuously keeping close eyes on china’s market. We are assuming any recovery would be in place after March onwards,” informed Mr. Vinod Kumar, Director, Paswara Papers Limited situated at Meerut, Uttar Pradesh.

Talking to The Pulp and Paper Times, Mr. Saifee Jani, MD, Jani Sales Pvt. Ltd said that “the movement of paper export shipment has been completely held off since mid January. Also the unavailability of containers will lead to revise the rate of placed orders due to freight hike. There has been no movement of a single container from China to any other country which created the crisis of out bound containers to shipping companies,”
“In fact, Coronavirus has increased the price of finished paper by INR 1.5 per Kg here in India because of hike in imported waste paper price. The reason behind hike is the shortage of containers’ availability. Lot of containers are still to offload at China and to offset this situation, logistics companies have increased the price of imported waste paper per container by 600 to 800 US Dollars. We have to pass on this hike to local consumer,” Mr. Patel said.

“In regards to the Coated Industry – there is quite a good gap as the largest producer Hi-Cote has not delivered any orders since a month now and this has given more mileage to Hansol & BILT in India,

In regards to the FBB – the mills in India have a good chance to export FBB. As such FBB was high priced in India at 860 USD Ex-works while the Ningbo Fold was priced @ 740 – 750 levels in the International Market – eventually the FBB units will fetch more profit due to this disturbance.

For the Cup stock – there is a major shift coming as being the hygiene products there is an apprehension in the Middle East and EU region to fetch the Polycoated Paper Board – especially the grades used in Food Packaging from China. They are scared to buy and eventually the next destination they are trying to explore is India. There are ample of orders placed in the Western Region,” Mr. Laddha said

The exports of FBB for Feb & Orders for March have gone up by 18 to 20 % at least (a jump from 700 to 900 MT order) and if the situation worsens this should go up. For Polycoated Cup stock – there is a rise of 30 % in exports and for Feb & March the quantity considering the orders on hand.

Certainly, there is a shift in a choice from the Asian countries to prefer India as an alternative to China but going forward how well China recovers and it can offer some price correction as well to get back the lost market.

The Paper mills in Gujarat and Maharashtra are taking shutdown for absorbing the corona’s outbreak. The shutdown is for 4 to 10 days in a month.

Situation in China

According to RISI’s report, all pulp and paper mills in the province of China have stopped operation. According to preliminary data from the National Bureau of Statistics of China, Hubei saw total paper and board production of 4.16 million tonnes in 2019, ranking its industry 7th out of 31 provinces in the country.

Shandong Chenming Paper Holdings have two mills in Hubei. The one in Huanggang city houses a 500,000 tonne/yr chemical pulp line which can swing between paper grades and dissolving grades. The other, in Wuhan, has 220,000 tonnes /yr of tissue, specialty paper and graphic paper capacity. Both facilities have been stopped for nearly two weeks.

The city of Xiaogan is a major hub for tissue production in China. Top producers, including APP China, Vinda International, and C&S Paper, have a total of approximately 680,000 tonnes/yr tissue capacity in the city. All of them are understood to be out of operation.

Hubei is also home to several large recycled containerboard plants. Long Chen Paper’s 1.15 million tonne/yr Songzi mill and Shanying International’s 550,000 tonne/yr Jingzhou mill shut down January 28 and January 29.

Golden Phoenix Paper, Hubei Shengda Paper and Hubei Xiangxing Paper Technology, which boast a total recycled containerboard capacity of 2.26 million tonnes/yr, have been down for about two weeks.

Contacts from the affected producers told that they highly doubt whether the facilities will be able to resume operations on February 14 as currently scheduled, as the number of confirmed cases of the coronavirus is still surging in the province and mandated lockdowns are expected to continue.

Paper and board manufacturers outside Hubei are also in a challenging situation. Most recycled packaging board plants arranged downtime over LNY holiday this year as usual. Now that people across the country are being urged to stay home to avoid spreading infection, the domestic recovered paper collection has practically stopped.

Mill workers who went back to their hometowns for LNY are struggling to get back to work as quarantine efforts have been stepped up beyond Hubei. Faced with a short supply of fiber and labor, small and medium-sized recycled board mills in China are mostly down, while leading producers are keeping a handful of BMs running.

In the virgin fiber-based sector, operating rates appear to be relatively higher as mills have sufficient wood pulp stocks. However, their inventories of finished products are rapidly increasing as stalled logistics blocks output at their own warehouses.

Trucking is the most important shipping method in China’s paper and board market. Producers that have nationwide sales networks in China do use water or rail transport for long-distance delivery but need truck transport to connect their warehouses with ports and railway stations.

Meanwhile, demand for paper and board is also weak as downstream industries have not resumed business either. Most converters and box plants are closed, except for those providing packaging materials for key medical goods, such as protective clothing and face masks.

“We restarted on January 28, six days earlier than previously scheduled, to produce boxes for a few customers in the medical industry,” said a box plant contact.

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