Waste Paper prices increased by 10 to 15% in July, and demand for Kraft will rise by the last week of August

Waste Paper prices increased by 10 to 15% in July, and demand for Kraft will rise by the last week of August 

- USA Mix waste and brown grades increased by $10-15/mt in last 20/22 days of July.

- Local Kraft waste rates increased in different parts of the country by Rs 1.5 to Rs 2.5 per kg in last 20 days

- Price increase in local waste paper is the reflection of price increase in imported waste paper prices and, therefore may continue for a longer period.

- Waste paper sellers are stockpiling the product anticipating rising rates and demand.

- Paper mill owners who sold their kraft paper at  ₹23 per kg increased prices to ₹25

New Delhi | 22 July 2023 | The Pulp and Paper Times

Waste paper prices again in India takes a jump in price. The rise witnesses 10 to 15% increase in domestic waste paper as well as imported grades of recovered paper is moving up.  The Pulp and Paper Times discusses the reasons for rising domestic waste paper prices with association of waste paper dealers, why the paper industry is facing challenges in growing, and the export prospects of the Kraft paper industry.

Speaking about the current situation of the paper industry, Mr. Naresh Singhal, president of The Indian Recovered Paper Traders Association (IRPTA) said, "The last ten days in the market were bad, and intermittent rain has worsened the situation, and it has not only affected Delhi but regions of Uttar Pradesh, Uttarakhand, and other Northern regions as well. On rainy days, no waste collectors go for door-to-door collection. Godown and shopkeepers avoid buying wet waste paper, because they may have to store it separately to dry it."

On asking whether rates of waste paper are affected due to rain, he said, "No, rain has not affected the rates, but the collection is not possible. Due to Kawad Yatra, the roads were closed. In Meerut, the rates of waste paper rose by ₹1.5 per kg of Kraft waste paper and reached around ₹15.80 from earlier ₹14-14.5. Similarly in the Muzaffarnagar belt, the rates have reached ₹16.30 -16.50 per kg in the last week."

Considering poor availability of waste paper and also good demand by the industry the rates of Kraft waste paper supposed to continue rise for another 15 days. After that rates will be subjected to the demand of finish paper and availability of waste Kraft paper. Whereas rates of pure white cutting reduced by only Rs 1 per kg to Rs 2 per kg in the last approx one month and on the contrary waste paper of the nature substituting pure white cutting like Old books sorted books REC Super REC Scan board HBR Farma and Pepsi cutting are strengthened by approx Rs 1/to Rs 1.5 per kg in different regions. Rates of School note books remained unchanged.

"The paper mill owners who sold their kraft paper at  ₹23 per kg increased prices to ₹25. Mills are not receiving orders at ₹25 because the delivery of orders booked at ₹23 is still pending. As a result, the rates of the finished product increased by ₹1 and reached ₹24 for 18 BF paper. Within one week, the rates of imported OCC, or soft mix paper rose by approximately $10 per ton. The rate of double-sorted paper reached $190, which was around $175 a month ago, and the booking was low as there were no sales and all the mills had pending inventory. The rise in imported waste paper prices resulted in the rise in the cost of domestic Kraft waste paper by 50 paise to 1 rupee."

"The impact is different everywhere. In some places, the rates have gone up by ₹1.5. In Gujarat, the waste paper rates have reached ₹15 per kg While in southern mills, the rates are approximately ₹13 -13.5 per kg," he added.

Sharing about whether the rates would rise further, he said, "The market will be stable for another week, and later, it would depend upon the cost of finished paper. If the market accepts this increased rate of ₹25, then the rates of waste paper will not decrease. If this does not happen, it may reduce by ₹1 -1.5 accordingly. Some mills are yet to receive their pending orders booked around  ₹23-24. The sellers have pending orders ranging between ₹22.5-24. Therefore, no one is booking finished paper at ₹25 per kg"

"The rate of finished product paper is similar throughout India. The difference is in the cost of waste paper which ranges between ₹13-15. The demand has weakened. When the government releases a letter about record-breaking GST collection and the share market trending on a higher side, to understand the economy, people focus on the share trends of the company, which is trending upwards, resulting in profitable companies. If these are trending upwards, why is the packaging industry down? Why is demand so low? Why is the industry trending towards negative growth?" He asked.

"The writing printing paper consumption does not get affected much, in fact, it increases every year by around 5 to 6%. The number of students and books remains the same or rise every year. Similarly, the office supply, like copier paper, and label paper, the paper usage does not vary much. Only the use of packaging paper is not fixed. The packaging paper like whiteboard, SBS card, hard card or whiteboard duplex paper, and premium packaging paper used in the Pharma industry has a less variation, but same usage," he added.

He said, "Kraft paper segment suffers the most, as there is low industrial growth. Due to festivals, the demand will rise by the last week of August, but there will not be a sharp increase. During festivals, the people use around 20% more packaging paper."

Sharing about paper exports, he added, "There is no chance for export. The raw materials in foreign countries are cheaper compared to India. China used to import paper. Now, even they have installed new plant and recycle paper there. The sale of Indian material has diminished or is close to over. Big foreign industrialists set up their units in developing countries, where they can source the waste paper at cheaper rates. They source, recycle, put it back into the industry, and reduce production costs. Due to automation, the manpower cost has also been reduced, along with the fuel and power costs."

He shared, "India exports quality Kraft paper to Bangladesh and Sri Lanka. The paper mills in Gujarat and Maharashtra are shutting down. Around 30-35 paper mills are ready to sell their units because they could not clear their liabilities and produce materials. One can find mills in every district of Gujarat. And similar is the case with Bihar, Jharkhand, and Uttar Pradesh. The number of paper mills has risen. They have local connections and sales and import the waste paper whenever they feel the shortage."

"The domestic market is afraid to book waste paper. If booked in higher quantities, they may face an economic crisis because it becomes difficult to release it. Earlier, they used to book 5000-8000 tons, but now they are booking in much lesser quantities. If paper mills receive imported material at a higher cost, domestic waste paper costs will also rise. The Indian market is the biggest in the world, and paper consumption is increasing, so there will be no shortage in supply for domestic waste paper," he said, answering whether waste paper prices will rise even more. 

Web Title: Waste Paper prices increased by 10 to 15% in July, demand for Kraft will rise by the last week of August