The market balance for publication paper in Europe is favourable with modest demand declines and reduced supply due to capacity closures, according to Norske Skog. The company will seek price hikes for all publication papers products in 2017.
Norske Skog is still committed to realising the tissue project at the company's Bruck mill in Austria. In the Q3 2016 quarterly report, Norske Skog explained that the project was progressing and the company was "in partner discussions for a brownfield conversion" of the newsprint line at the Bruck mill to tissue. The company expects tissue production to ramp-up in 2018.
Norske Skog had announced plans for tissue production at the Bruck mill back in July 2015 and had founded a joint venture with the Italian tissue paper and products manufacturer Rotocart for this purpose. However, the JV-partnership was terminated in the first half of 2016. According to sources close to the project, the partnership failed due to differing views on project financing, ownership rights and occupational issues.
The tissue project is said to result in the discontinuation of newsprint production at the Bruck mil by the end of 2017, reducing market supply by 125,000 tonnes. Together with the announced machine closures at the Holmen Madrid and UPM Schwedt mills, the closure of PM 3 at Bruck is expected to further tighten supply on the European newsprint market in the year to come and create favourable conditions for price hikes, Norske Skog explained.
In the Q3 2016 results webcast, Sven Ombudstsvedt, Norske Skog President and CEO, announced that Norske Skog was aiming for at least 30 €/t price increase for newsprint from 2016 into 2017 and that the company would also seek price improvements for other products in Continental Europe. Prices in the UK would see even higher mark-ups due to the weakness of the pound sterling, he added.