External factors including the Chilean earthquake which has impacted pulp production together with closures and downtime in some European mills have also contributed to pricing pressure. The significant fluctuations in the US and Aussie dollar cross currency rates are also having a major effect on pricing.
Consequently printers in Australia will be looking at rises of between five and ten per cent for many grades from the middle of next month from the major merchants.
According to PaperlinX, the demand for higher pricing continues to be fuelled by surging pulp prices and raw materials. Also contributing to the need for these increases is the constant news of closures and downtime taken by unprofitable mills.
Rohan Dean, group strategic sourcing manager at PaperlinX says the markets of Europe and Asia can be described as tight with allocations and delayed shipments on both coated and uncoated papers and boards. He adds there was no alternative to announce a price increase effective August 16 between 2-10 per cent across all grades. He says, “For printers it will certainly be tough, we are all in this together but unfortunately we do have to pass on the increases.”
Also commenting, Simon Doggett managing director of the country’s biggest independent paper merchant KW Doggett, says customers can expect a price jump of around 5 – 7 per cent across most commodity grades. He says, “We are doing everything possible to decrease the impact on printers as we know what pressure they are under. But unfortunately, no one is in a position to swallow these costs.”
Meanwhile, David Bull, sales director at CPI says cost input pressure, particularly at a time when mill operating rates are high and capacity is tight, has lead to a confident approach from manufacturers. He says, “We will implement increases to reflect the higher cost of inventory and will continue to monitor the situation carefully. Increases will vary across our paper grades and be effective at the end of August.”
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