Contrary to expectations at the end of last year, prices for kraft sack paper and paper sacks weakened in the first quarter of 2012 as converters and producers confirm.
Prices for kraft sack paper and paper sacks came down in the first quarter of the year, but after a traditionally weak fourth quarter and a cautious start to 2012, ordering activity started to gather momentum in late February and early March. Lead times have increased again to between five and six weeks, according to industry reports. Operating levels of most paper sack manufacturers are higher than the average. The cyclical dip in demand over the cold season was not seen, say reports. Even the short period of intense cold in February did not cause any dent in ordering activity. However, other reports also speak of a poor start to the year. Order inflow was 20% lower compared with the same period last year, a sack producer told EUWID.
The renewed increase in prices of pulp and recovered paper has moved producers to think about price hikes. "First announcements of an increase of at least 10% effective as of 1 May have already been communicated to us,” a converter told EUWID. He believes that manufacturers of kraft sack paper want to restore prices to where they were in the fourth quarter of 2011.