Lockdown: Paper mills on the verge of closure in Western UP | Dip in WPP price | Uncertainty grapples

New Delhi | 20th April 2021 | The Pulp and Paper Times:

The second wave of corona pandemic in India is gripping the paper industry to an uncertain situation. Unexpectedly rising in covid cases have led New Delhi to a week-long lockdown till 26th April, while night curfew and weekend lockdown in Uttar Pradesh has already been announced, This lockdown will hit the paper mills in western Uttar Pradesh majorly, the demand reduction in paper, logistical disruptions, lack of labour and raw material shortage will surface the difficulties for the paper mills in coming days. 

“We don’t have any new orders in present-day; traders are not interested in forward trading, they just want to secure their payment only and consuming in-stock inventory first. Also, Delhi is a big hub for corrugation units, lockdown led the migration of labour, box making units has no option but to shut down or reduce the production,” said Mr. Ashok Bansal, Managing Director of Nikita Paper Limited at Shamli, Uttar Pradesh.

“There is a panic in kraft paper demand also, lockdown and night lockdown diluting the paper demand. We don’t have good orders in hand of kraft,

“This situation is expected to be remaining till 15 to 20 May, if the peak of corona wave comes down, then demand will pick up again. We are anticipating that production of kraft paper is expected to be scaled down and price may also dip by 10 to 15 percent,” Mr. Akshay Jain, Director - Silverton Pulp & Papers Ltd. situated in Muzaffarnagar, a leading manufacturer of high grade Writing Printing Paper and Packaging Grades Paper informed.

“There will be no downfall in packaging grades prices like duplex, coated, FBB,” Mr. Giriraj Gupta Prop. PLG Impex a leading importer and indenter of paper and board situated in Delhi anticipate.

Exclusively talking to The Pulp and Paper Times, Mr. Pankaj Aggarwal, Director- Bindlas Duplux Limited says, there is uncertainty among traders, the fear of extension of lockdown forcing them to empty their godown and encash the value of inventory, they are not placing new order. Labour shortage creating a crisis for corrugators in the smooth operation of box manufacturing hence less demand from them also.

“We will on the verge of force shutdown in just next three days,” Mr. Bansal said. 

Paper Mills in Mazuffarnagar are in trouble and planning to take shut down if the situation doesn’t improve.

Despite adding the rising demand from e-commerce (for groceries) is not good enough to spike packaging demand at least for the next 30-45 days due to manpower shortage, supply chain issues.

Mr. Bansal further said that this lockdown will severely hit the supply chain of waste paper. Delhi is solely accountable to supply the 70 percent of waste paper to western UP paper mills. Lockdown will shut down the waste paper collection shop or godown in Delhi which will spike the price of raw material in the coming days.

All India Waste Paper Dealers Association (AIWPDA) said in its tweet that due to the second wave, the demand for paper is reduced and so are the prices of OCC & Finished Kraft. On contrary, Kraft mills have again started increasing the price of OCC so as to maintain the value of stock hoarding for OCC and finished as well.

Mr. Pankaj also described the waste paper situation, currently; waste paper is not available at any cost, collection of waste paper is dropped due to labour migration. We are also considering closing our mill.

“Online sale is double now, but the demand of paper is not increasing, most of the small online e-commerce portal is disobeying Court order in which it directed to use paper or disposable packaging in deliveries. They are using plastic wrap replacing paper from their packaging,” Mr. Pankaj said.  

All India Waste Paper Dealers Association (AIWPDA) President, Mr. Naresh Singhal explained the situation and says that demand for all grades of finished paper and board are very low level due to Corona pandemic. Almost all paper mills have a big stock of waste paper in hand approx equivalent to the requirement of 45 days to 80 days. In the current scenario, available waste paper stocks are much higher than the demand. A large number of duplex board manufacturing units has stopped their purchase for time being due to not having space for unloading waste paper.

The closure of the paper mills may eventually spike the Kraft paper price, as corrugators fall under essential services.

Lockdown Impact on Writing & Printing Paper

“The price of Indian manufactured writing and printing paper will see dip in price by 10 to 15 percent due to the suspension of exams, and schools session,” said Mr. Giriraj Gupta, Prop. PLG Impex situated in Delhi.

Mr. Gupta says the fear of closer of writing & printing paper manufacturing paper mills is very strong. Closure of most educational institutions and continue plummeting demand may lead them to shut down the mills in next 15 to 20 days.

“There has been ZERO order position in writing and printing grade due to the closure of schools and institutes across India. The price of WPP is touching low base, actually, there is no customer in the market,” said Mr. Akshay Jain, Director - Silverton Pulp & Papers Ltd. situated in Muzaffarnagar.