Low-cost imports shake India’s white-grade paper industry; a slight drop in demand for Kraft paper is anticipated, says IRPTA

Low-cost imports shake India’s white-grade paper industry; a slight drop in demand for Kraft paper is anticipated, says IRPTA

-Current rates of corrugated/kraft waste paper in Western U.P. and the North India market are Rs.18,500/PMT to Rs.19,500/PMT. The all-India market average price in this category is Rs.18,000/PMT to Rs.19,500/PMT

-30% to 40% of the market share for white-grade paper in India has been captured by foreign paper mills.

-Since the beginning of 2024, the price of premium white-grade waste paper has dropped from Rs.54 per kilogram to Rs.34 per kilogram
The Pulp and Paper Times

India’s domestic white-grade paper industry is under pressure due to an influx of low-cost imports from countries like China and Indonesia. These imported products, offering high brightness and quality, are priced significantly lower than domestically produced paper, creating a tough competitive environment.

Despite having government orders, many white grade paper mills are struggling due to a downturn. If the situation persists, a rate correction in both finished paper and waste paper in this grade may be expected.

Talking to The Pulp and Paper Times, Mr. Naresh Singhal, president of The Indian Recovered Paper Traders Association (IRPTA) said, “Imported paper is adversely impacting the demand for WPP, copier, specialty paper, and SBS in India. Paper mills from China, Indonesia, and other countries are dumping their products in India at very low prices. According to dealers, paper with 92% to 95% brightness, made from softwood or hardwood, is entering India at a landing price of $650 per ton, causing significant challenges for ‘A’ grade paper mills. These mills are struggling to match the prices of imported paper,”

Mr. Singhal stated firmly that 30% to 40% of the market share for white-grade paper in India has been captured by foreign paper mills. These mills are highly automated and save significantly on labor and energy costs due to their large-scale production, enabling them to compete strongly with Indian paper mills.

“Many recycled-grade paper mills producing white-grade paper have been altering their product mix to secure market orders. The demand for copier paper made from recycled material has drastically plummeted,” he added. "Some paper mills in Gujarat have shut down their production due to the unfavorable pricing dynamics in the market. If dealers or traders can import wood-grade paper with 90% brightness at a cheap price, why would they purchase C-grade material made from recycled paper?"

There has been a severe reduction in orders for white-grade paper, with 40% of the market captured by imports and the rest being contested by pulp-based or agro-based paper mills.

Mr. Singhal also highlighted that since the beginning of 2024, the price of premium white-grade waste paper has dropped from Rs.54 per kilogram to Rs.34 per kilogram. The situation has become so dire that bagasse- and agro-waste-based paper mills are now selling pulp with 85% brightness to smaller paper mills instead of producing paper themselves.

Kraft Paper Scenario 

According to Mr. Singhal, Delhi NCR has crossed dangerous pollution levels over the past week, prompting the implementation of GRAP (Graded Response Action Plan) Stage 4 regulations three days ago. Due to these restrictions, the entry of heavy vehicles into Delhi has been halted, affecting the transportation of non-essential goods in the city. This has led to a shortage of trucks for transporting scrap paper, disrupting its supply. As a result, the rates of Kraft waste paper in Western Uttar Pradesh's Kraft paper mills have seen some fluctuations.

Current rates of corrugated/kraft waste paper in Western U.P. and the North India market are Rs.18,500/PMT to Rs.19,500/PMT. The all-India market average price in this category is Rs.18,000/PMT to Rs.19,500/PMT

In the past week, Delhi NCR has also experienced fog, mist, and colder weather, signaling the start of the winter season. On November 19, 2024, the minimum temperature dropped to 12°C. If the cold weather continues, scrap paper collection could be impacted. However, due to the wedding season, demand for craft paper has remained stable. After December 10, a slight drop in demand for craft paper is anticipated.

As is the case every month, there is a likelihood of a production halt in Uttar Pradesh's Kraft paper mills between November 28 and December 2. 
 

Web Title: Low-cost imports shake India’s white-grade paper industry; a slight drop in demand for Kraft paper is anticipated, says IRPTA