Even though publication paper producers in Europe are closing down capacity prices for newsprint and magazine encountered pressure in the latest round of negotiations in the UK.
The dice had been cast for the most part on the British newsprint market in mid-January. With just a few exceptions, buyers and suppliers agreed on new prices to take effect from 1 January. All things considered, buyers were in control and managed to lower prices. Both, buyers and sellers have their backs against the wall, but ultimately the existing surplus capacity was playing a decisive role.
Prices have tumbled substantially when converted into euros, the noticeable drop in the pound sterling against the euro in recent weeks is playing a significant role. As a result, several Continental European newsprint suppliers had less interest in serving the British market.
Magazine paper prices have also come down in the UK since 1 January. UPM's latest announcement of plans to close significant SC paper capacity came too late to have an impact on most deals. The magazine paper sector is a buyer's market, and battles for customers and market share have left their mark on prices. Competitive pressure for SC and LWC offset paper was especially pronounced. Producers are accusing one another of landing customers by offering cheap prices.
⇒ This article is an excerpt from EUWID's monthly report on the UK paper market. The EUWID Price Watch UK for January 2013 will be published in EUWID Pulp and Paper no. 04 on 23 January.
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