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The European graphic paper prices are at a turning point. After several months of relative stability, some grades are still hanging to their prices, while other have succumbed to the pressure to lower prices amid weak demand and well-stocked inventories. In addition, price differences have also been reported in each national market for the same grade.
Read on to find out how European graphic paper prices have changed for newsprint, lightweight coated (LWC) paper, supercalendered (SC) paper, uncoated woodfree (UWF) paper and coated woodfree (CWF) paper in March and what market participants anticipate for April.
European newsprint prices stayed more or less stable over March, depending on the extent and rigidity of quarterly agreements in each national market.
The 45-g range in the UK, where quarterly agreements are the norm and half-yearly agreements are still used as well, did not change at all from February, sticking at £685-780/tonne.
France, Italy and Spain saw the bottom end of their ranges drop by Euro 25-30/tonne as some suppliers gave way on pricing, and some quarterly agreements were negotiated downwards. But other suppliers held their pricing steady.
Meanwhile in Germany, where many buyers have opted for monthly agreements this year, the range dropped across the board, from Euro 850-900/tonne to Euro 800-860/tonne.
Towards month’s end, buyers in all the markets surveyed said that big price declines are coming through in April/Q2.
LWC paper buyers across Europe were bemused by the grade’s stable pricing over March, given the reported extreme weakness of demand.
Prices in the UK, where quarterly agreements remain widespread, did not budge. Nor did the range change in Spain, where buyers are wholly dependent on imports.
Elsewhere, the bottom end of the range fell back by Euro 10/tonne or so. Producers explained that besides doubting lower prices would lure in new business, very low machine running rates were increasing their costs per tonne.
SC paper prices also held steady in Spain and the UK and steady on the high end in all the markets surveyed, but otherwise saw bigger low-end drops of Euro 20-40/tonne.
For both grades, contacts predicted there would be significantly lower prices in April/Q2.
After several months of price stability in spite of low demand and mounting pressure, prices for UWF paper started to crumble in March. According to market insiders, the amounts of the reductions varied wildly across the industry, and a few contacts continued to report unchanged levels.
“I wouldn’t yet call it a general decrease. UWF is still doing pretty well in comparison [with other graphic paper grades], but a certain downtrend is definitely perceptible,” a contact said.
Others, however, were more pessimistic.
“It was a question of time and we all saw it coming. It is true that you cannot boost demand by lowering prices, but still this is what’s happening now,” one of them commented.
“I fear that this is just the beginning. Now we have to wait and see how quickly and how low prices fall. Stopping the trend seems to be impossible right now,” a third one noted.
Prices for CWF paper also started to fall in March. According to market insiders, levels dropped by some Euro 20-40/tonne. However, considerably higher decreases were also mentioned in some cases.
“We did what we could, but in the end the pressure got way too high,” a contact noted.
While some market insiders reckoned that the price decreases would contribute to some business revival, others were skeptical.
What we need are capacity reductions. Temporary production management worked for a while, but now it’s time for permanent closures.
“Customers are not buying because they don’t need paper and because prices are high, but mainly because they are still well stocked. Will they start buying now? No, because now they will wait and see how low prices will drop,” one of them said.
This article was first published in our PPI Europe newsletter. Find out how you can access the latest market developments in Europe directly from your inbox by speaking to our team.