Kraft paper mills face challenges: shutdowns and price fluctuations mark January 2025

Kraft paper mills face challenges: shutdowns and price fluctuations mark January 2025

-Kraft Paper mills in Western Uttar Pradesh and nearby states, with margins shrinking by Rs. 2,000 to Rs. 2,500 per metric ton
-Kraft Paper mills in Western Uttar Pradesh and neighboring regions have announced another production shutdown from February 2 to February 7, 2025
-Overall corrugated waste paper collection from various sources has plummeted by 55-60% in January 2025
The Pulp and Paper Times
Insights By Naresh Singhal, president- Indian Recovered Paper Traders Association

The Kraft Paper industry is grappling with significant challenges as demand has plummeted since the start of 2025, forcing major adjustments in production and pricing strategies across North India and Western Uttar Pradesh.

Demand Decline and Shutdowns

With the beginning of the new calendar year, a sharp drop in Kraft Paper consumption among box manufacturers and packaging units disrupted the market. In response, Kraft Paper mills in Western Uttar Pradesh and North India halted production between January 2 and January 7, 2025, in an attempt to stabilize the market. However, these measures failed to curb the ongoing decline in demand.

Price Reductions
The persistent slump compelled Kraft Paper mills to slash prices of finished Kraft Paper, with reductions ranging from Rs. 1,250 to Rs. 1,500 per metric ton (pmt). As of January 2025, the rates of 18+ B.F Kraft Paper in North India stand at approximately Rs. 31,250 per metric ton (ex-mill).

Waste Paper Supply and Price Surge
Simultaneously, the reduced consumption of Kraft Paper led to a significant drop in waste paper generation during conversion processes, with domestic collection of Kraft waste paper decreasing by 45-55%. Overall corrugated waste paper collection from various sources has plummeted by 55-60% in January 2025.

This decline in waste paper availability has increased demand from Kraft Paper mills, driving prices up by Rs. 2,000 per metric ton. Currently, corrugated waste paper prices in North India hover around Rs. 20,500 per metric ton.

Profit Margin Squeeze
The combined effect of reduced Kraft Paper prices and rising waste paper costs has severely impacted the profit margins of Kraft Paper mills in Western Uttar Pradesh and nearby states, with margins shrinking by Rs. 2,000 to Rs. 2,500 per metric ton.

February Shutdowns
In a bid to sustain the market, Kraft Paper mills in Western Uttar Pradesh and neighboring regions have announced another production shutdown from February 2 to February 7, 2025.
The Kraft Paper industry's current challenges highlight the delicate balance between production, pricing, and demand. Industry stakeholders will closely monitor these developments in the coming months.
 

Web Title: Kraft paper mills face challenges: shutdowns and price fluctuations mark January 2025