Surge in international Pulp prices triggers significant price hike; Red Sea Crisis heightens uncertainties

Surge in international Pulp prices triggers significant price hike; Red Sea Crisis heightens uncertainties

Key Points
- With the recent increase, hardwood is quoted at $750 PMT and inching toward $800, while softwood is quoted at $950 PMT and moving towards $1,000, the highest pulp prices in recent times
- Shanghai container freight index has recently increased from 1,750 in April 2024 to above 3,000
- Port congestion in China and other Asian countries is pressuring an over-stretched container shipping market
The Pulp and Paper Times | 5th June 2024

Virgin grades paper prices are seeing a correction with recent developments affecting the Indian paper industry. International pulp prices have surged significantly by $50 per ton on hardwood and softwood pulp. The price hike is announced against the backdrop of the Red Sea crisis and increased freight costs.

There have been price hike circulars issued by Bilt Graphic Paper Products ltd. (BGPPL) and APP (China). The increase looks significant, ranging from Rs 1,000-3,000 per ton for various virgin grades. 
The changing geopolitical landscape and challenges arising from the Red Sea have heightened uncertainties and impacted global trade flows. This is evident in disrupted supply chains, soaring transportation costs, and port congestion.

Bilt Graphic Paper Products informs in its circular to all channel partners and dealers that the Shanghai container freight index has recently increased from 1,750 in April 2024 to above 3,000. Spiking ocean shipping rates, vessel backups at seaports, and empty container shortages—issues that wreaked havoc on global trade during the COVID-19 pandemic supply-chain crisis—are back as the industry enters its busy season.

“Port congestion in China and other Asian countries is pressuring an over-stretched container shipping market that is already reeling from shortages of vessel space and equipment. Singapore, the world's second-busiest container port, is now experiencing severe delays. Empty containers are piling up at various ports, while China and Singapore are reporting shortages.

This has a consequential impact on all globally traded commodities, including pulp and paper. Pulp prices are continuously moving up month on month. With the recent increase, hardwood is quoted at $750 PMT and inching toward $800, while softwood is quoted at $950 PMT and moving towards $1,000, the highest pulp prices in recent times. There are no signs of pulp prices abating in the near term,” the circular stated.

APP (China) stated in its intimation to all channel partners that due to soaring freight costs and increases in raw material costs, it has become necessary to initiate this price increase to cover the costs. Thus, they are announcing a minimum price increment of $50 per ton effective immediately.

To partly neutralize this cost increase along with some other variable and fixed cost increases, Bilt Graphic Paper Products is announcing the following price changes in coated papers: a P3 (+Rs 1,500 per ton) on C2S (80–350 GSM) grades, and (+Rs 3,000 per ton) on C1S, C1S SP, and other grades of BHU PM2.

This price increase is applicable to all fresh orders placed from June 10, 2024. However, effective June 20, 2024, all billings are to take place at P3. BGPPL has limited allocation at P3 on an all-India basis, and after completing the allocation, P4 shall apply. Similar to the last practice, distributors shall be given the offer to convert their pending orders at P3 for billings effective June 20, 2024.
 

Web Title: Surge in International Pulp prices triggers significant price hike; Red Sea Crisis heightens uncertainties