COVID dropped the Paper Imports by 55K Tons per month; Time to en-cash on the anti-China sentiments

COVID dropped the Paper Imports by 55K Tons per month; Time to en-cash on the anti-China sentiments

LIC has called off their printing of diaries | Demand for W & P grades is expected to shrink by 20-22 % in India

Bangalore | 7th November 2020 | The Pulp and Paper Times:

The Writing & Printing Segment has been the worst affected sector in the Paper Industry due to its huge reliance on the education sector in India. The shrunk demand has resulted in a noteworthy drop in Paper imports to India. India has witnessed a significant decline in coated, Copier and wood-free uncoated writing and printing paper’s import during post-COVID months.

Addressing to Indian Paper Industry’s stalwart during an IPPTA’s webinar, Federation of Paper Traders Associations' Incoming President and Managing Partner at Mittal Trading Company, Mr. Deepak Mittal said, that there have been around 55,000 tonnes per month decline in paper import to India during COVID. Pre-Covid, India was importing 65000 Tons / Month coated paper which has come down at 25,000 Tons/month, Copier paper’s import has come to 1500 – 2000 Tons/month, earlier it was on 7,000 Tons/month and Uncoated wood free paper has witnessed a drop of 10,000 tons/month in import.

Indian paper industry is suffering major losses on account of WP paper prices drop; Maplitho, Copier and coated grade paper have registered a 15 to 25 percent price reduction in post COVID months. The prices of Un-coated wood free are at 10 - 15 years low.

"quite surprising how in six months, prices can go so low especially when we know that the rise is so laborious," Mr. Mittal outlined.

While giving his expert knowledge on the paper industry, Mr. Mittal said, the demand for Copier & Coated paper in India is close to a million Ton each.  For a country with a population of 1.40 Billion people, this figure is too small a number.  In China, there are Coated Machines which are 1.5 million tons/annum more than the total demand of India’s Coated Paper.  With Government’s renewed focus on marketing and to make India the Factory to the world, there will be a lot of demand for the paper (apart from Packaging) in Brochures, Catalogues etc. which will drive demand for Coated Paper etc.

Insisting on the anti-China sentiments, Mr. Mittal believes that the anti-China sentiments across the globe will result in large expert Businesses for the Printing & Publishing segment. Customers globally are willing to look at products from other Countries even if it means at a slightly higher premium.  This has been confirmed by some of our customers also.

"For the Indian Paper Manufacturers too, it's a great opportunity to en-cash on the anti-China sentiments.  Customers have started resisting Chinese products.  There is close to 1.0 to 1.2 million tons/annum of imports of W & P grades into India.  If we can build capacities at a competitive cost and convert these imports into domestically manufactured products, it will be a great "ATMANIRBHAR" success story for the Paper Industry," Mr. Deepak says.

In 2020, globally the demand for W & P grades is expected to shrink by 18% and in India also, the number expected is around 20% - 22%.

Mill Operated during Quarter-wise (2020) in India is as under:

Q1 – 40% of last year’s demand )

Q2 – 70%of last year’s demand ) So cumulatively there will be a demand destruction of 

Q3 – 90%of last year’s demand ) approximately 20% – 22%

Q4 – 110%of last year’s demand )

The Shrinkage of demand has been very swift & in a way that has never been experienced either by the Trade or the Industry. The size of the global paper industry as some of the earlier speakers have highlighted is 425 million tons and India’s share is 4.3% (18.2 million Tons).  In this interestingly, the W & P share has been steadily declining.

To add to the problem, the Commercial Printing segment like diaries, calendars, promotional printing like brochures, catalogues etc. have been badly impacted as lot of companies have either canceled their requirements for this year or moved their promotional exercises to digital.  The big daddy of diaries – LIC has called off their printing of diaries this year and lot of other Government Departments and Corporates have followed suit.

“After recovering majority of losses of 2020 in 2021, globally the W & P grades are expected to shrink by an average of 4.9% till 2024 wherein close to 13.8 mn tonnes/annum of demand will shrink during this period,

“This is where India will break away from the world (barring mimicking the world in 2020) & its demand is expected to grow by an average 3 – 4% p.a.  till 2024 & reach 6.5 mn tons/annum thereby adding approx. 1 mn tonne p.a. to its kitty,” Mr. Mittal shared. 

Web Title: Covid dropped the Paper Imports by 55K Tons per month Time to en cash on the anti China sentiments