Demand for kraft paper is on the rise, with the festive season set to provide a significant boost: Insights by Deept Agarwal of Paswara Papers

Demand for kraft paper is on the rise, with the festive season set to provide a significant boost: Insights by Deept Agarwal of Paswara Papers

-The below article is written by Mr. Deept Agarwal, Management Executive - Paswara Papers Ltd, India
-From an input cost perspective, a key development is the declining fuel cost for many mills
-Imported waste paper prices are expected to hold steady for the near term

The Pulp and Paper Times

The Indian Kraft paper market, especially the packaging paper segment, is currently growing strongly, driven by increasing consumer demand and positive market sentiment. The industry, having overcome recent logistical disruptions, is showing signs of a robust recovery and is ready for a period of growth. Demand for Kraft paper is on the rise, a trend boosted by the strong Indian economy and a strong consumer base. This increased consumption is expected to be further boosted by the upcoming festive seasons, including Diwali, a time when consumer spending and e-commerce activity spike. Industries such as FMCG and pharmaceuticals, as well as the ever-expanding e-commerce sector, are placing significant orders for packaging materials, indicating a healthy and confident market. 

From an input cost perspective, a key development is the declining fuel cost for many mills. This is largely due to the growing shift from traditional coal to more economical alternatives like Refuse Derived Fuel (RDF). This adoption of RDF is a positive move, not only for controlling production costs but also for enhancing the industry's sustainability profile. 

The international recovered paper market remains a crucial factor. Imported waste paper prices are expected to hold steady for the near term, with DSOCC from the USA anticipated to remain around $200 per ton. European OCC prices are also projected to stay in a similar range, with a potential for a slight decline to around $160 per ton. This relative stability in imported raw material costs, combined with domestic market strength, provides a solid foundation for price stability and profitability. 

Future anticipation for Kraft paper demand is positive. The market is projected to continue its growth trajectory, driven by factors such as government regulations promoting sustainable packaging and the ongoing expansion of industrial and retail sectors. The upcoming festive seasons will act as a major catalyst, causing a direct increase in demand for corrugated boxes and other packaging materials, making the market's future look even brighter. 

So, the Kraft paper market is in a good state. Strong domestic demand, declining input costs from a shift to alternative fuels, and a stable imported raw material price environment create a very favorable situation. The sentiment is positive, and the future appears promising, with the festive season set to provide a significant boost.
 

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