Coated paper prices reduce amid pulp prices bottoming out, wood crisis for integrated mills in India

Coated paper prices reduce amid pulp prices bottoming out, wood crisis for integrated mills in India

-Pulp Prices seem to have bottomed out and are expected to take an upward turn anytime
-The International Market is in slow condition or in bad position the effect too comes to India.
-Difficulty in obtaining Wood, resulting in a substantial rise in cost for all integrated Mills in India.
The Pulp and Paper Times | 9 October 2024:

Most mills will look to raise rates to cope with cost pressures and to maintain profitability in line with the past two years. However, this may not materialize as expected due to a global increase in supply across all segments, which has yet to be matched by demand. Despite these promising figures, FY 25 is expected to be challenging for the Paper Industry due to the continuous increase in worldwide production capacity and ongoing global uncertainties. Mills may face difficulties in maintaining their EBITA. 

Bilt Graphic Paper Products informed in its circular dated October 7, 2024 to all channel partners and dealers that pulp Prices seem to have bottomed out and are expected to take an upward turn anytime. Additionally, we expect demand for W&P Paper to pick up at the backdrop of the onset of Scholastic season, Year-end Printing and Tender Orders.

In light of the current market scenario and to stay competitive, BGPPL is reducing the prices of Coated Papers. Prices of C2S are reduced by Rs 3000/- PMT and C1S & C1S SP by Rs 5000/- PMT (any scheme prevailing in the last month is merged in this price drop). Further, to align with the Market, we are reducing the upcharge for C2S Paper 111-139 Gsm from Rs 2000/- PMT to Nil. The upcharge for C2S 90-94 gsm to 95-110 gsm and for 80-89 gsm to 90-94 gsm shall remain unchanged i.e. Rs 2000 PMT.

This change will be effective for billings w.e.f. 01.10.2024. Prices for Uncoated grades shall remain the same.

“Demand for WPP is anticipated to remain weak till October end, making it a good period for end-users having handsome volume for getting better deals to combat inventory cost and will in turn help manufacturers to cover up the shortfall. Also in this period good volumetric Government tenders can help Mills to overcome present market challenges. Demand for publishing and notebooks should rise after Diwali, and we may see actual price hikes only after that. In the Copier segment, the competitive pressure from International Players will continue to affect domestic mill prices. Due to the lower demand in the WPP segment, mills are likely to shift focus to increasing copier production, intensifying market competition” Mr. Ankit Bandi, Director of Jayant marketing said to The Pulp and Paper Times

Talking to The Pulp and Paper Times, Mr. Bhavesh Gala, Managing Director of Infinity Industries, said that overall Market condition presently is in unstable and is in wait and watch model. As the present condition as the International Market is in slow condition or in bad position the effect too comes to India. But Indian basic consumption of Paper is there but as soon the rates stabilises across the products, the demand will come up again to normal position. India is in much better position for demand of Paper. 

“We had previously informed you about the considerable difficulty in obtaining Wood, resulting in a substantial rise in cost for all integrated Mills in India. It is anticipated that the situation will take at least two to three years to get normal. Keeping in view the latest Wood prices in the country and corresponding Paper prices, many integrated mills in India shall be on single digit operating margins if at all,” stated by the circular of BGPPL.

“The Prices across the Products should stabilise in the next few months to near Precovid Rates and will work around the same. As we deal in commodities and our commodity grow on trees which we replenish as much as we want easily and due to lot of technology and technical properties upgradation, the rates will remain in pressure. So the correct rates across the world for our Paper Commodity is near to Precovid rates only,” Mr. Gala said.
 

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