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Kraft Paper: The demand of 'Brown' is getting declined

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Impact on Kraft Paper Mills in western region of India due to Covid 19

Kraft Paper: The demand of 'Brown' is getting declined

Drop-in OCC waste price won’t be sustained a long time | Price drop of 18 BF Kraft up to ₹ 2 in coming days | Confusion and uncertainty on lockdown implementation

Vapi | Mumbai | 22nd April 2021 | The Pulp and Paper Times:

The raging second wave of Covid-19 infections in India is threatening to derail the gradual recovery the economy achieved in the last one year, the lockdown like situation in Maharashtra and some other states is plummeting the demand of paper. 

Largest kraft paper manufacturer in India with 1000 TPD paper productions, Sukraft’s Managing Director Mr, Shankar Patel said, that the demand of kraft paper has been dropped by 20 to 25 percent in last one month. Due to the unexpected spread of Covid pandemic people have reduced consumption; they are more likely to concentrate on essentials only.

Paper mills are depending upon the export orders to continue their operation.

“There is no major reduction in demand, traders just want to exploit current market scenario to have price correction in paper, and they don’t want to do extra buying due to pandemics. No doubts, export of pulp to China has reduced up to some extent,” said by Mr. Nishith Patel, Director at Spento Papers India LLP producing 300 TPD quality coated duplex board in Morbi Gujarat.

According to the Gujarat Paper Mills’ Association, The price of 18 BF Kraft paper, which was hovering at about ₹39 per kg, has dropped down to ₹35, triggering decline in prices across the board.

Sunil Agarwal, President of the Gujarat Paper Mills’ Association, says the demand of paper in local market has been dropped significantly, on the export front; China has cut down its buying with no absolute reason coming out. Paper mills are facing very pathetic situation, the cloud of darkness hovering around.

Mr. Shankar said, we are operating at the full capacity on all six units, we have export orders also. Organically, we are expected that demand will pick up again in June month” Mr. Patel said.

Mr. Piyush Trivedi, Managing Director at Mahadev Craft Papers Pvt. Ltd, a newly started paper mill in Meshana, explains the situation and says, the demand of kraft paper in last one month has been dropped up to 50 percent, and we are expecting more price drop of 18 BF up to ₹ 2 in coming days.

Mr. Shankar says, we don’t thinks that there will be a correction in kraft paper prices because the export of paper still continues. The drop in OCC waste price won’t be sustained a long time.

Mr. Agarwal said, besides the demand, there is confusion and uncertainty, which is unclear, on lockdown implementation. State Governments want to open the industry but have closed the consumption points i.e. shops and malls. Hotel and restaurants are closed, take away delivery consumes lots of paper. We also need other accessories like chemicals, belts, bearing bolt, etc. for smooth operations of a paper mill, but Government has shut down all these kinds of shops. The Paper industry is not enabling to digest this kind of lockdown. It’s a slow poison for the industry. 

 “Those paper mills are manufacturing kraft paper between 12 to 16 BF paper, may experience a reduction in price,” Mr. Shankar said.

Mr. Nishith further said that there is no lockdown in Gujarat and with the advantage of ceramic industry, the demand of boxes will continue to propel.

“We are operating on the full capacity on all six units, we have export orders also,” Mr. Shankar said

“Situation is going to be worse in coming days, if demand further drops, we have to close our factory,” Mr. Agarwal said.

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