PAPER SECTOR UPDATE
Paper chase The paper sector endured a torrid time in 2022, with rising costs, strikes and supply chain issues causing major problems. But these problems are easing and 2023 is looking much brighter for manufacturers, sellers and customers.
For many in the paper industry, 2022 was a year to forget. Rising costs, along with a strike at one of the major paper mills in Europe, along with ongoing problems in the supply chain that developed during the pandemic meant that supplies ran short and prices rocketed. “For the first half of 2022, paper supplies were really disrupted,” says Steve Carter, managing director of Advantia. “Things got so bad that at one point, some paper merchants ran low on stock, and dealers were rationed on how much paper they could order from manufacturers and suppliers.” Indeed, there were genuine concerns that there could be a shortage of paper stocks at one point. But the corner was turned when the long-running paper mill strike was concluded, and production was ramped up again. “That meant that in the latter part of the year, the market started to ease somewhat. It also meant that pricing stabilised and paper has been coming through in good volume for
a while now,” says Steve. The price has also been helped by a
relatively benign winter in Europe, Steve adds. “The paper industry, particularly in Europe, was fearful of having a long and cold winter because if that had happened, then the energy prices would have gone up even more than they already have and that would have had an impact on the operations in Europe and you would have seen possible paper price increases coming through.” Another stabilising factor has been that paper mills in Asia have been sending paper across to Europe again, Steve notes. This was largely curtailed during the years of the pandemic as shipping costs rocketed to unprecedented levels, which made it uneconomic to send it to European markets. However, as the shipping sector has unwound the problems caused by the pandemic and the Ever Given ship blocking the Suez Canal for six days, shipping prices have returned to more normal levels, making it viable to import paper from Asia again.
Steve Carter managing director Advantia
advantia.co.uk
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