Mexican containerboard, European newsprint and China’s Covid-19 lockdowns: Top paper market headlines

Containerboard prices rise in Mexico, pulp demand in China is impacted by lockdowns and European newsprint prices increase again

Mexico containerboard prices rise in April on high production costs

Packaging

Prices for recycled containerboard increased in Mexico in April, with producers succeeding in implementing part of a previously announced price hike for linerboard and medium.

  • Sources reported that prices moved up by 700 pesos per tonne
  • Negotiations started after prices increased in the US and rising production costs in Mexico
  • Corrugators are demanding more paper from local producers in order to substitute for imports
  • Imported US kraft linerboard increased by $30 per tonne in April

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Covid-19 lockdowns in China dent fundamental pulp demand

Pulp

China’s strict anti-Covid-19 lockdowns, most notably in Shanghai, have thrown a wrench into paper and board (P&B) mill logistics across the country, depressing fundamental demand for market pulp.

  • Producers state they have product ready but no truck drivers to make deliveries
  • Lockdown measures have also hindered the pickup of pulp from ports for delivery to mills
  • A sign of a slowdown is the decline of resale South American bleached hardwood kraft (BHK) pulp in the domestic market.

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European newsprint prices rise again due to high gas prices and low paper availability

Paper

Despite the fact that prices rose to all-time highs in January, newsprint demand continued to be higher than supply, constraining buyers’ negotiating power, while extremely high gas prices forced paper mills to implement further price increases or energy surcharges from mid-March or the beginning of April.

  • April, newsprint prices inched up further as paper producers imposed additional energy surcharges
  • Norske Skog and UPM impose additional energy surcharges
  • Many market sources believe that newsprint demand will start to decline substantially in 2022 because of the incredibly high sales prices
  • The printing industry, which is struggling to absorb paper price hikes as well as other rising input costs

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