Wood prices, pulp prices, and a depreciating INR have exerted substantial upward pressure on paper prices; paper mills increase prices amid these challenges

Wood prices, pulp prices, and a depreciating INR have exerted substantial upward pressure on paper prices; paper mills increase prices amid these challenges

The Pulp and Paper Times

The Indian Rupee (INR) has experienced notable depreciation, leading to a considerable rise in the cost of all imported raw materials. The depreciation of the INR has also impacted the wood/woodchips import program, posing challenges for integrated players as they struggle to manage raw material supply issues.

Bilt Graphic Paper Products Limited (BGPPL) informed all channel partners and dealers in its circular dated January 20, 2025, that with the New Year, there has been a rise in pulp prices in China, with an increase of +20 USD already implemented and an additional hike of 30 USD effective February 1, 2025. Moreover, a shortfall of approximately 1 million MT of hardwood pulp for the month, attributed to ongoing maintenance shutdowns and conversions to dissolving pulp, has constrained the supply.

“Further, the Indian Rupee (INR) has undergone significant depreciation, approximately 2.5% over the past 45 days. This devaluation has resulted in a substantial increase in the cost of imported raw materials. Unit Bhigwan has been particularly impacted, as it depends on imported raw materials for approximately 65% of its total requirements by value,” BGPPL stated in the circular.

Speaking to The Pulp and Paper Times, Ms. Beth Lis, VP-Asian Paper and Packaging at Fastmarkets (RISI), said, “India is one of the few markets in Asia where we have a fairly positive outlook for graphic paper demand over the next several years. This optimism stems from demographics and the government’s ongoing focus on education and associated revisions to curriculum that are underway. In addition, the healthy economy and rising incomes will help support demand for graphic papers; even as digital and e-media capture more of the market, there will remain a role for print media. India’s market will continue to be attractive to other Asian suppliers, especially with the low or negative growth rates we expect in many other markets in the region. The capacity increases currently occurring in China and later expected in Indonesia in 2026 or 2027 will keep suppliers in these countries looking for outlets for their production.”

“In line with previous communication regarding peak seasonal demand in the education, food, and HORECA segments, pulp price upheaval across the globe, and exchange rates, we have also observed upward movement. As projected, price stability/upheaval in all segments is occurring. Manufacturing costs for tissue and WPP are also on the rise, as chemicals, softwood, and machine parts are imported. Further, raw material (wood) costs are sharply moving north. In view of the above, tissue prices will be increased by us very soon,” Orient Paper & Industries Ltd stated in its circular dated January 15, 2025.

“Cost drivers, i.e., wood prices, pulp prices, depreciating INR, etc., have exerted substantial upward pressure on raw material costs. To partially offset the impact of rising input costs, we shall apply P1 (+1500 Rs/MT) on all uncoated grades except copy paper effective February 1, 2025. We shall also apply P2 on coated grades effective February 1, 2025, which was earlier announced effective January 18, 2025,” BGPPL stated.

“Although there is a lack of specific and comprehensive data on pulp prices in India, it is crucial to monitor global trends as they often influence domestic markets. India’s paper industry is heavily reliant on imported pulp, and fluctuations in global pulp prices can directly impact the cost structure for domestic paper manufacturers. Currency fluctuations and global shipping costs also play a significant role in determining the final cost of imported pulp in India,” said Mr. Pankaj Mishra, Head of Sales & Marketing at Vamshadhara Paper Mills Ltd (Sennars).

“As a result, we expect prices to move north by 3-4% in January and further by a similar quantum in March 2025. Should there be any escalation in pulp prices, these increases may be even higher. We also wish to emphasize that this time, we shall not be able to extend any old price benefits based on bookings, volumes, or other considerations. The price applicable shall be based on the dispatch date. Kindly inform your customers about this development and encourage them to step up dispatches to mitigate the impact of the price revisions,” BGPPL stated in its circular dated December 28, 2024.

“We have no other option except to pass on partial increase in market. Keeping the consideration of this we are increasing Price of Copier Paper by Rs. 1000/MT applicable in all regions with immediate effect. Pls. intimate all your channel Partners accordingly.” Bindals Papers Mills Limited  said in its circular.
 

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