Recycled Kraft Paper Industry faces worst year amid demand collapse and payment crisis: IRPTA President Naresh Singhal

Recycled Kraft Paper Industry faces worst year amid demand collapse and payment crisis: IRPTA President Naresh Singhal

- kraft paper manufacturers in western U.P. recently announced a price hike of Rs. 1,000 PMT just three days ago
Western U.P., Uttarakhand |  26 June 2025:

The recycled kraft paper industry has witnessed one of its toughest phases in the last 12 months, marked by rock-bottom prices, low demand, and a severe liquidity crisis, according to Mr. Naresh Singhal, President of the Indian Recycled Paper Traders Association (IRPTA).

Prices at Historic Lows

Over the past year, both finished kraft paper and waste kraft paper rates have plummeted to historically low levels. Current average prices in western Uttar Pradesh and Uttarakhand stand at:
• Kraft Waste Paper: Rs. 19,300 to Rs. 19,800 per metric ton (PMT)
• Finished Kraft Paper (18+ BF, 140 GSM): Rs. 27,250 to Rs. 28,000 PMT

Demand Collapse and Payment Crisis

“The demand for kraft paper fell to its lowest in recent memory,” said Mr. Singhal. This demand crisis was compounded by delayed payments from buyers, putting additional pressure on suppliers who are now grappling with severe cash flow constraints. Waste paper suppliers, wary of mounting unpaid dues, have reduced supplies to mills, further tightening the market.

Production Cuts No Longer Sufficient

To balance the market and maintain profit margins, the industry adopted regular production shutdowns of 4 to 5 days every month throughout 2024. However, after February 2025, this practice was discontinued, leading to a sharp fall in prices and an even more stressed market environment.

A Temporary Relief: Price Hike Announced

In a collective move, kraft paper manufacturers in western U.P. recently announced a price hike of Rs. 1,000 PMT just three days ago. This move temporarily stabilized the market, generating enough orders to sustain production for the next 7 to 10 days and halted the continuous fall in prices.

Suppliers Struggle to Survive

Adding to the challenges, input costs have risen, while shrinking volumes have severely impacted the margins of waste paper packagers, collection vendors, and suppliers. "For many, even covering basic expenses has become difficult," noted Mr. Singhal. The lack of significant waste paper stocks at mills further underscores the fragility of the current situation.

Short-Term Disruption, But Demand Expected to Bounce Back

Looking ahead, the kraft paper market is likely to experience a temporary drought between July 15–16 and July 22–23, coinciding with the religious Kavad Yatra, which historically disrupts transportation and trading activities in Western U.P..

“The entire Western U.P. will be disturbed for about a week during the Kavad Yatra. Until then, the market will remain stable,” said Mr. Singhal.

Apple Season to Boost Kraft Demand

A key ray of hope is the upcoming apple season in Himachal Pradesh, which traditionally drives strong demand for kraft paper used in apple box manufacturing.
• An estimated 4.5 to 5 crore apple boxes will be required this season for packaging.
• This demand will benefit mills in Punjab, Himachal Pradesh, and U.P., providing a temporary but significant uplift.

“Box production for apples has already been underway since May, with about 30-40% stock ready. As apple harvesting begins, the demand for kraft boxes will further pick up by July 10 onwards,” Mr. Singhal added.

Industry Outlook Remains Uncertain

While the recent price hike has offered a momentary breather, the long-term outlook for the recycled kraft paper industry remains uncertain. Stakeholders are hoping for a sustained recovery in demand and improved payment cycles to bring the industry back on track. Mr. Singhal forecasts that following the end of the Kavad Yatra on July 22–23, both demand and rates will start to rise steadily. The uplift is expected to continue with the onset of the festive season, which starts early this year

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