Sappi announces 10% price increase

The 10% increase will apply to woodfree coated (WFC) sheets and reels for deliveries from 1 June, and is in addition to the rise of 10% for WFC sheets and reels implemented by Sappi last month.

According to the South African company, input costs have continued to rise because of pulp, chemicals and oil prices going up substantially, which has resulted in the need to put up prices.

A weaker euro has exacerbated the situation, it said, affecting manufacturing and distribution costs and cutting Sappi’s margins on coated fine papers to “unacceptable levels”.

Elsewhere, the company said recent market demand for lightweight coated (LWC) and medium weight coated (MWC) paper grades indicated “a steady recovery leading to improved capacity”.

Sappi claimed that current prices for these grades are “at an all time low”, having declined “substantially” since the autumn of 2009. The group is in discussions with customers to stagger rises over the remainder of the year.

Marco Eikelenboom, sales and marketing director of graphic papers, Europe, said the price increases resulted from a general rise in input costs. He added: “Although the events in Chile have tightened the pulp market further, it has been the general increased demand for pulp, oil and oil-based products that is causing the current pressure on our margins.”

The company has also been hit by the 16-day port workers’ strike in Finland, which has since been resolved. Eikelenboom said it had caused “a serious disruption of material to and from Finland”.

He refused to rule out any further price rises, saying this would depend on the continuing global demand for raw materials and Sappi’s products.

See also: Sappi Fine Paper Europe warns of price rises

Paper manufacturers set to impose further price increases

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