Kraft Paper Mills in North India stopped down production for 5 days due to low demand & high input cost

Kraft Paper Mills in North India stopped down production for 5 days due to low demand & high input cost

Delhi | Ghaziabad|  Uttarakhand | 4 August 2023 | The Pulp and Paper Times:

Paper Mills in north India have stopped production for five days ( 3 to 7 August 2023) due to declining demand for kraft paper. Paper mills in western Uttar Pradesh and Uttarakhand have closed due to low demand induced by high raw material prices, shrink margins, overproduction of kraft paper and declined export.

Mr Vinod Aggarwal, Director, Paswara Papers Ltd., told The Pulp and Paper Times, Mills are shut down for 5 days starting from 3rd. Aug. to 7th.Aug.23 due to low demand of paper in the market, low price realisation due to over production and high Input cost i.e high cost of Indian waste paper etc.

On the Shutdown by paper Mills, Mr Naresh Singhal, President of The Indian Recovered Paper Traders Association (IRPTA) said, paper mills in western Uttar Pradesh and Uttarakhand have increased the finished paper by Rs 2 per kg from Rs.25, while kraft waste paper is still at Rs. 15.50 to 16. Paper mills want to create short supply in the market to accept the enhanced price of Rs. 2 per kg.
“The purpose of this shut down from is to break the supply chain of finished paper in order to create shortage to settle the market at their desirable rate” Mr Naresh explained.

“There is a shortage in demand globally, inflation is on the higher side, import orders are decreased and even corrugators are not using full capacities. We hope that demand should pick up in next two-three months and this shutdown will correct the market.” Said by a paper mill owner.

Regarding the shutdown, Mr Amit Singla, Managing Director of PSB Papers based in Uttarakhand, said that overproduction, lack of demand and high raw material prices are the main factors behind this shutdown. Margins are low.

Mr Amrish Singhal, CMD of Muzaffarnagar-based Silvertoan Papers Limited, told The Pulp and Paper Times that in the previous three years, kraft paper production capacity has expanded by about 40% in proportion to demand, which has climbed by barely 18 to 20%. Due to overproduction, Paper mill owners agreed to shut down paper their operation five days in August to balance the demand-supply equation. 

“Raw material prices are on the up side while the low demand of finished paper is shrinking the margin of paper mills. We are selling finished paper at Rs 25 to 26 per kg for 18 BF. Imported waste paper price has increased by $25 touching $150 pmt” Mr Amrish informed.

Mr Naresh said that this entire situation arose due to the fact that Kraft paper mills were working only at a difference of Rs 8500/ pmt as conversion charges, which they want to increase to Rs 12 per kg. after the shutdown.

"Paper mills have suffered significant losses, and the shutdown has spread to Uttarakhand, Punjab, Haryana, Uttar Pradesh, and western Uttar Pradesh." Amrish stated.

Mr Singla informed that export of paper to china has been completely stopped and paper is being exported from southeast countries; apart to this, Indian paper mills didn’t pay attention to the quality of paper in order to retain the export market. There are paper mills in morbi for sale. Demand will not improve so fast due to higher capacity penetration.
 

Web Title: Kraft Paper Mills in North India stopped down production for 5 days Due to low demand & high input cost