Demand for envelope and shipping bag paper picked up at the beginning of the year. Manufacturers reported better operating rates with orders on hand currently amounting to 3-4 weeks across all grades.
The renewed attempt of manufacturers of 80 g white woodfree envelope paper to hike prices was crowned with success this time round. Converters are paying 2-3% more compared to the fourth quarter 2012 for all deliveries as of 1 February, it is learnt.
Recycled envelope paper witnessed no price changes compared with fourth quarter contracts. Prices for VKP 3 and VP 4 shipping bag paper also remained unchanged. However, one manufacturer reported he was planning a €40/t price increase all across Europe with effect from mid April, explaining his plans with an ever widening gap in costs and a serious drop in margins. The tough market conditions have recently claimed their first victim in Germany. Recycled envelope and shipping bag paper producer Tönnesmann & Vogel filed for insolvency and suspended production at the end of March.
The downward trend in demand for envelopes continued in the first two months of 2013. Nevertheless, manufacturers were not dissatisfied with order inflow until Easter. “October to March are usually the best months of the season”, one producer said, adding that order intake is traditionally seen to weaken again in the following months.
Consolidation in the envelope market is continuing. With effect from 31 March, Mayer-Kuvert-Network has acquired the envelope business division of Papyrus Deutschland. In 2012, Papyrus Kuvert produced around one billion envelopes at its site in Ettlingen, Germany. In the coming months, the production of paper envelopes will be gradually relocated from Ettlingen to other sites of Mayer-Kuvert.
