More paper price rises on the way
Thursday, February 9, 2017
A month after paper price increases of up to 10% were implemented across the board, a number of mills have now announced subsequent increases for coated and uncoated woodfree grades.
Lecta is set to increase European prices of all two-side coated woodfree grades in sheets and reels by 8% to 9%, effective with deliveries from 13 March.
“The price movement is unavoidable to offset rising manufacturing costs, particularly energy, pulp, latex and other raw materials,” the firm said in a statement.
Sappi Europe, meanwhile, will increase prices of all European coated and uncoated fine papers, both sheets and reels, by 8% from 15 March.
It said: “The sudden and continuing sharp rise in input costs and the consequently squeezed profit margins make corrective pricing measures inevitable as Sappi Europe’s graphics business becomes unsustainable at current price levels.”
In November, The Navigator Company sent a letter to merchants seen by PrintWeek to say it would increase prices for its uncoated woodfree products by a minimum of 6% per grade in December, but it appears that this move was slightly delayed.
Price rises in North Africa and the Middle East were ultimately fully implemented in January and the European price increase will now be effective on dispatch of goods from 24 February.
The company said the price increase is inevitable due to “the strong pressure on the industry's cost structure, which has undermined profitability and led to the closure of several plants in the US and Europe”.
In a statement it added: “Moreover, in recent years the paper industry has endured a significant decline in paper prices, which caused the lowest paper price levels in Europe in the last seven years. This balance results in an inevitable need to take action to mitigate those effects.”
It said the new prices will be sustained by the positive signs it has witnessed in the last few months, and which it expects to continue in the coming months, with a better outlook in European markets and the strengthening of overseas markets.
The firm’s 2016 results, released today (9 February), revealed that its turnover dropped by 3.1% year-on-year from €1.628m (£1.384m) to €1.577m. Its operating profit declined by 18.6% in the same period from €282.9m to €230.4m.
Most of the paper merchants PrintWeek has spoken to in the past couple of months have said they would expect to put their prices up in line with increases set by the manufacturers.