Demand of W&P Paper will rise around September; the prices of wheat straw reduced by 40%, fuel and coal have also come down

Demand of W&P Paper will rise around September; the prices of wheat straw reduced by 40%, fuel and coal have also come down 

 7th July 2023 | The Pulp and Paper Times:

-Paper industry capable of achieving 25-30 % of growth in next year or so
-Wheat straw have come down by almost 40 percent, and even fuel, coal and everything is gone down by about similar percent
- four to five percent decline in pricing in the coated and uncoated segment,

Mr. Pavan Khaitan, shares his insights over current pricing and demand patterns within the paper industry. He states that profits for the sector will remain robust despite a decline in paper prices, and plans to expand the company's speciality paper manufacturing capacity by 15,000 tonnes and an overall capacity increase of 25%.

Sharing his insights over the current pricing and demand patterns within the writing and printing sector, Mr Pavan Khaitan, Vice Chairman and Managing Director of Kuantum Papers Limited, stated, “Paper pricing has come down a little for sure, and the impact is largely because of the lean period which paper industry witness normally every year. So the demand cycle is usually lower at this point of time.”

Sharing why the price of coated as well as uncoated paper has come off sharply, is it due to demand or a supply issue? he said, “This is a lean period which the industry witness every year. The demand will rise around September, when the new education year starts and the printing for the new year, which is 24-25, will start. In September, everybody starts filling up their pipeline, so this is a normal trend. We will witness about four to five percent decline in pricing in the coated and uncoated segment, but more so the impact has been offset by a reduction in costs of inputs. The cost of inputs has come down quite dramatically both on account of raw material and fuel and that is helping us keep operations quite healthy.”

Speaking about the margins, he added, “In terms of numbers, we will see the margins are going to be similar to the past. Fortunately with even this large kind of production we will not witness impact on margins per se, because there's been quite a decent decrease in raw material input pricing. For instance, the prices of Wheat straw have come down by almost 40 percent, and even fuel, coal and everything is gone down by about similar percent. The impact has been offset as I mentioned by reduction in costs and the margins being quite healthy.”

On future visibility, he stated, “The future demand is going to be quite healthy, in fact, we are adding on to our current capacities. Our two smaller machines, on which we produce specialty paper, are under renovation, and we will be able to increase our capacity by about 15,000 tons per annum, and that will help increase our specialty paper volumes in the market. Also the plans are afloat to increase our capacities on the larger machines as well. Overall speaking and we will manage to increase our capacity by about 25%, and from a production point of view, we will reach a level of 200,000 tons from current 150,000 tons, within the next 12-16 months.”

Speaking about volume trends for the entire industry, he added “As an industry, we should be capable to achieve growth of about 25 to 30 percent margin, as all trends are present because of reduced costs and pricing.”
 

Web Title: Demand of W&P Paper will rise around September; the prices of wheat straw reduced by 40%, fuel and coal have also come down