No price drop expected in WPP & Coated Papers for the next 4 to 6 months, says industry expert Mr. Hiren Karia

No price drop expected in WPP & coated papers for the next 4 to 6 months, says industry expert Mr. Hiren Karia

Key Points:
- Delayed imports & increase in exports the domestic A grade mills will be in a better position to pass on the price increase in the market.
- The Markets will absorb the price increase once the festival demand picks up
- Don't see prices coming down in WPP & Coated papers for the next 4 to 6 months

The Indian paper industry is struggling with the effects of surging ocean freight rates, driven by the Red Sea crisis and congestion at critical global supply chain ports, leading to a dramatic increase in container prices over the past month. Drewry’s World Container Index has surged to $5,318 per 40ft container in the last 60 days, a significant rise compared to the previous year. The ongoing uncertainties and disruptions in global supply chains, partly due to supply-demand imbalances and geopolitical tensions, have severely affected the flow of goods. As a result, the prices of imported raw materials have risen sharply, and ocean carriers have implemented general rate increases, peak season surcharges, and other charges, impacting all globally traded commodities, including pulp and paper.

The Pulp and Paper Times interviews Mr. Hiren Karia, Partner at Jay Raj Fine Paper Company, about the future of paper pricing and the current state of imported paper. Here are his insights:

Q: The prices of various grades of paper, such as WPP, SBS, FBB, Copier, Duplex, and coated paper, have been increasing since April due to the Red Sea crisis and rising pulp costs. Do you think the market is absorbing this steep hike in paper prices, especially with the availability of cheaper imported paper?

All import prices have gone up due to increase in Ocean freight & non avaibality of containers. The Pulp rates have also increased to around $.740/Mt. this has put a lot of pressure on the input cost of all grades of paper. The Markets will absorb the price increase once the festival demand picks up. In Duplex, Kraft & FBB the current supply is much more than the market demand and for this reason it will be difficult for prices to get absorbed fully.

Q: Is the import of paper still impacting the market dynamics of paper pricing amid the price hikes by A- grade paper mills? Imported paper is also experiencing price increases due to uncertainties.

The increase in Ocean freight has impacted all the imported mills due to sharp increase in cost of shipping freights. There has been delayed shipping from many countries like South Korea, Japan, China, Indonesia etc. This has created a supply side issues. With anticipation of good demand ahead of festival season, delayed imports & increase in exports the domestic A grade mills will be in a better position to pass on the price increase in the market.

Q: There is an anticipation that these disruptions will take 8 to 12 months to stabilize. How do you predict the paper pricing scenario in the next 4 to 6 months?

In my option the markets will remain good for the next 4 to 6 months. I personally don't see prices coming down in WPP & Coated papers for the next 4 to 6 months.
 

Web Title: No price drop expected in WPP & coated papers for the next 4 to 6 months, says industry expert Mr. Hiren Karia