Skip to main content

Paper Industry News Updates

27th February 2024

Written by Iwan Le Moine

Newsprint/Mechanicals struggling but Woodfrees driven back up… temporarily?

Last November (2023), we wrote that paper demand was horrendous, operating rates were seriously low, downtime was common place and order inflow was still very weak (after atrocious summer), which all meant that paper prices were falling and would keep doing so for the foreseeable future.

Well, we were right in some instances (newsprint and magazine paper sectors), but wrong in others (woodfree paper sector).

One supplier in particular was extremely surprised by our position relating to woodfree paper pricing and orders, especially as they had been successful in raising their prices to buyers, already in December 2023. Other suppliers had followed suit and so the momentum was reached for a start of the year Q1 Woodfree paper price hike.

We were very negative for all paper grades at the end of the year and it would seem that, for now at least, we were wrong re. European Woodfree Papers. The domino-effect of rising speculative pulp prices in China, seems to have knocked into upward pressure on UWF – and some CWF sheet – prices in January 2024 and this did somewhat surprise us.

A Positive January

Meanwhile, the start of the year certainly started more positively in January, although we guard against making too many assumptions from this one month’s data, and so we add the growth rate in January the previous year for a more contextualised comparison.

W. European Demand:

Jan-24Jan-23(Combined)
Newsprint-7%-15%-22%
Uncoated PW Papers-10%-19%-29%
Coated PW Papers-3%-32%-35%
Graphic Papers-7%-22%-29%

With Graphic Paper operating rates still around 73% (3mma) in January 2024, we can assume that much lower industry rates (supported by greater mill consolidation) has definitely become the new norm in our industry, for now, at least.

With some cost, transportation/delivery and pulp issues, as well as with buyer sentiment moving towards a relatively stronger market, partly driven by average (woodfree paper) lead times rising over five weeks for the first time in more than a year (since December 2022), the momentum is very much with the mills, although primarily the woodfree ones for now.

Having said all that, industry dynamics are still far from ideal for all mills, with merchant stocks rising, demand (in absolute terms) still low – despite some less negative numbers in January – pulp list prices still rising (although record discounts persist), and macro-economic indicators are mixed and probably rather lacklustre. Yes there are some additional issues, not least the ongoing war in Ukraine, and those relating to transportation due to the current war in the Middle East, and specifically with the Persian Gulf and Suez link, although we believe these to be rather limited in terms of disruption to the European graphic paper industry, nor do we believe these will be long-lasting. We are also keeping an eye on the strikes which have been activated during some days in Finland earlier this month and last; should the situation there persist and worsen, it could certainly add pressure on both industry operating rates and thus prices.

Paper Industry Supply Side Updates

On the supply side, Norske recently announced that its 260,000t SC PM6 due to restart in mid-year will now remain closed for the remainder of the year. So that is the equivalent of approx. 9% of total 2023 W. European SC capacity that is due to be down for the whole of 2024. Which is probably very much needed given 2023 operating rates averaged 64%, and the latest three months show an improvement only to approx. 70%, still a long way off a balanced market. Note also that given the restart of the smaller 100,000t PM5 after last year’s landslide, it is highly likely, given current market conditions, that PM5 could end up become a permanent replacement for its larger sister machine (PM6), with the latter being eventually converted to packaging. 

In short, we were wrong about UWF prices in Q1 2024. For CWF too, where some grades have stabilised (Reels), whilst others have managed small increases, our contacts report, presumably on the back of a stronger UWF market (driven by higher pulp pricing too), but we were absolutely right about mechanical paper prices, right across the range, from Standard Newsprint to LWC via SC Magazine papers. 

Given current dynamics, the ongoing geopolitical situation, macro-economic indicators, including inflation still not fully under control, and industry over-supply, we continue to have a rather pessimistic view for 2024, at least in H1, but without a change in fundamentals, also for H2. The original article was posted on Linkedin here

Note that EMGE have recently launched the brand new monthly global Containerboard Monitor and are also nearing completion of a new global Cartonboard Monitor. Should these be of interest to you and your colleagues, please contact

Free Sample

News