Newsprint producers seeking larger mark-ups in the UK than on the Continent
Manufacturers have informed their customers in the UK about coming price hikes for publication paper deliveries. The exchange rate situation is compelling producers to seek larger hikes on the UK market than in continental Europe, especially in the case of newsprint.
A new round of price talks has been firmed up on the British newsprint market in June, with suppliers attempting to raise sales prices by up to 10% or £30-40 for deliveries from 1 July. Market insiders said that some suppliers planned to return to price levels seen in the second half of last year.
According to paper companies, price hikes for newsprint are indispensable, especially in the UK where price have been exceptionally poor for some time now due to the currency situation. The general price trend combined with the exchange rate had pushed UK prices to an absolute low on the international stage when converted into euro, it is learnt. Consequently, manufacturers felt that the British market needed a larger price increase than continental Europe. What is more, raw material and other costs remained high, suppliers said.
Several EUWID respondents believe that price plans have good chance of at least partial success in spite of the fact that UK and continental European manufacturers reportedly had entered the talks with different starting positions. Extensive downtime and capacity closures had come to bear, they said. Manufacturers also typically reported good capacity utilisation and call-offs running as expected, even though May had been rather weak due to the number of public holidays. By contrast, sceptics did not see any real turnaround as a result of the capacity closures, also as overall demand for newsprint continues to fall on the Continent and in the UK.
This article is an excerpt from EUWID's monthly report on the paper markets in the United Kingdom. The EUWID Price Watch UK for June will be published in EUWID Pulp and Paper no. 25 on 19 June.
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