Examining the imported recovered fiber landscape for India amid Red Sea crisis: insights from Mr. Hrishikesh Vora, Adler Paper 

- Paper industry is going through a tough time with recovered fiber in January and February
- There is definitely a collection shortage all across Europe, UK and the Middle East, not so much, but it is in Europe and UK where majority of the short fiber is coming from.

The Pulp and Paper Times provides a brief analysis of the Red Sea Crisis and its implications for the paper sector. India is a significant importer and exporter of various paper goods, including pulp, finished paper, waste paper, and other types of paper. This crisis could have an effect on the market's price structure and put the sector in disarray. We conducted in-depth analyses of the Red Sea situation and spoke with a number of prominent figures in the paper sector. here are the opinion of Mr Hrishikesh Vora, CEO- Adler Paper : 

The Pulp and Paper Times:

Q: How this suspension of vessels in the Red Sea will impact the Indian Paper Industry?

Honestly, this situation with the shipping lines, I feel personally, will have a big impact on the Indian paper industry. Any delays with shipments and waste paper material for paper mills who are running hand to mouth right now with imported waste is going to cause problems in production. This could possibly lead to local waste prices going up. Also, this could lead to shortage of imported waste paper also coming into the country. So until this act gets together, till we have a clearer picture of what all the shippers are doing and what the shipping lines are doing, the paper industry is, I feel, going to through a tough time with recovered fiber in January and February.

Q: Will the price of imported recovered fibre for India see a rise in price in the coming time? Any assumption of price per tonne? 

So honestly, as I mentioned, I definitely see if there is a delay, if shipments are cancelled or suspended till there is clarity on what the shipping lines want to do with prices, I see definitely a price increase in India and I see a price increase in India shortly. Not even in the long term, in the short term, because this time it's very clear that the shippers don't want to pay the prices, the buyers in India don't want to pay the prices. So till then, this is cleared and sorted out, all shipments it seems will be on hold. Or it seems that there might be a situation where shippers might not ship anything till they get certain, I would say confirmations or certain assurances from the shipping lines which could possibly lead to fiber shortage and price increases.    

Q: Domestic waste paper and finished kraft paper may have a price impact due to this crisis. May the market see the price rise? 

100% domestic waste paper will go higher it could go through the roof also if there is no material coming in from Europe, UK, and USA. In this situation, what will happen is the paper mills in India will definitely look to buying more from the Middle East but with two major ports in the Middle East also shut down it's going to be a different scenario. So if the shipping situation doesn't improve domestic waste paper is definitely going to increase finished craft paper now let's see if there is no material to produce because there is no waste paper in the pipeline or there is no as I would say fiber in the pipeline then where are the paper mills going to produce also craft from. So will this see price increases? This is something that we will have to wait and watch as the situation develops.

Q: How will this situation impact the imported pulp prices to be used by Indian paper makers for different grades of speciality and writing and printing paper?

It's all connected. If there is a hold in shipping or if there is a delay in shipping, I feel that this will impact imported pulp prices for sure. But what we have to understand your second part of the question-Specialty and writing and printing paper. These grades are anywhere not much collected right now in Europe, there is a shortage of these grades. We're not finding too many specialty grades. Writing and printing paper is coming to India, but not from mainland Europe and UK and USA. Only those who really want it are buying. It's not coming in bulk quantities. Everybody's buying domestic or from the Middle east. So writing and printing paper market is strong, which is a good thing. But to find prices that match these paper mills expectations over here, because writing and printing or newsprint also for that example, all the paper mills across the world are just slashing their prices to prime made to order material. So it's getting very competitive for domestic paper mills in India to compete with these international writing and printing and newsprint paper mills out of the world.

Q: Do you think this could turn into a win-win situation for some of the big paper mills in terms of price and market monopoly ? as the imported paper will also be costlier?

Well, if the big paper mills do have material in the pipeline, and if the paper mills have enough stock on their floor, then, yes, I definitely think that they will have the advantage over the paper mills who are running hand-to-mouth, as the imported waste will be costlier for sure. So, yeah, those mills now who have inventory, who have tons in their warehouse, who have tons in the pipeline that is on the way to India already, in spite of this crisis, and are well secured with good tons for the next couple of months, then, yes, I think they will do much better than the other smaller paper mills out there who are running hand to foot and who are buying as per what their finished paper order is.

Q: If this disruption is prolonged, The Indian domestic market may see a sharp increase in the paper price of ‘A’ grade paper mills’ (wood-based WPP and copier) products if the pulp price increases. 

So, yeah, that's another thing. Pulp prices continue to increase and they are increasing. So will the Indian domestic market see a sharp increase? I don't think so. I think it will continue to be. There's a lot of noise out there that paper mills are increasing prices for the ‘A’ grade paper mills who are making the wood based WPP and copier. Well, it's all a supply and demand based scenario. And we've seen last year that, how the supply and demand has been, and we've seen that the paper mills are trying to adjust to the domestic market over here since export has completely shut down. So that's kept costing very stable. So, yes, if this disruption is prolonged, it may see a sharp increase in price, but I'm not very confident that we will get to that sharp increase in price for these a grade paper mills.

Q: Any other important comment for the paper industry? or any planning and strategy to be followed.

2023 was definitely a tough year. I definitely think that 2024 will be a much better year. But, yeah, now with this whole shipping line disruption, we're going to have to wait and watch how the situation unfolds. So, yeah, my own opinion has been last year and continues to be, always keep buying weekly. If you have a capacity to buy 20 tons, buy five. But keep buying something weekly. Average your price costing out. That's the only way to survive in this market. There is definitely a collection shortage all across Europe, UK and the Middle East, not so much, but it is in Europe and UK where majority of the short fiber is coming from. America continues to be in a different tension. Prices go up and up. So I still believe that for paper mills to survive, averaging is the key, and that is what I think needs to be followed. We're still adjusting to export being completely shut down and all the material produced here in India to be distributed and be sold domestically. So we're still seeing that adjustment, we're still seeing paper mills in difficult times. We're still seeing paper mills shutting down. I believe there will be more shutting down in the future because there's just over production and less demand. So that will still continue this year. When the market settles down and finds its, as you say, water finds its level, the market will find its level, but till then, just average it out. Best way to go and best way to survive, according to me.

Web Title: Examining the imported recovered fiber landscape for India amid red sea crisis: insights from Mr. Hrishikesh Vora, Adler Paper

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