European manufacturers launch price hike initiative for magazine papers
Sappi, Burgo and Heinzel have revealed their price hike plans for coated and uncoated mechanical papers on the market in Europe.
Laakirchen Papier, a Heinzel group company, has decided to increase prices for supercalendered paper (SC paper). Today, the company announced a 8% price increase for deliveries from 8 July. According to Laakirchen Papier, the price hike is motivated by higher costs for raw and auxiliary materials.
Last week, paper manufacturer Sappi had informed its customers of a 5% price increase for coated mechanical reels as of 1 July. "The continuing cost inflation and the consequently declining profit margins make the price correction inevitable," the company explained.
Italy's Burgo group is also set to increase its prices for coated mechanical papers for deliveries as of the start of the third quarter. The company is asking for a 4-5% price increase effective 1 July.
Reduced SC paper supply to lend support to producers' price hike plans
Manufacturers of LWC and SC paper have witnessed a significant reduction in sales prices over the last 12 months. EUWID market research showed that prices for certain mechanical paper grades remained under downward pressure well into the first quarter year despite higher costs for raw materials and energy.
Suppliers in the SC paper segment believe that they have a chance of establishing higher SC paper prices in contracts for deliveries in the second half or third quarter of the year. They point to capacity closures in Germany, Austria and Sweden that have already started at the end of 2016 and will slash SC paper production capacity in Europe by a total of 600,000 tpy once they are completed in August 2017.
According to the European Association of Graphic Paper Producers (Euro-Graph), European SC paper shipments increased by 2.8% to 3.87 million t in 2016. Shipments to Europe accounted for 83% of the industry's total shipments in 2016.
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