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Paper producers in France bemoan exploding costs and procurement problems

04 Oct 2021 − 

Cost increases "unprecedented in magnitude.”

As paper producers in France recover from the collapse of the market in the pandemic year 2020, their production figures are approaching pre-crisis levels but, like their peers elsewhere in Europe, they are facing major problems due to skyrocketing production costs and a shortage of materials and services. In a public statement on the current situation, COPACEL, the association of French paper manufacturers, says the rising costs represent a heavy financial burden for companies, many of which have been forced to take measures in order to restore their margins.

Besides the limited availability of some materials, paper manufacturers in France are also struggling with significantly higher expenses: Since the beginning of the year, price increases for fibre raw materials, the key cost factor, have been "unprecedented in magnitude”. Within a period of eight months, prices for the recovered paper grades sorted graphic paper for deinking (1.11) and old corrugated containers (1.05) reportedly rose by 84 and 207 per cent, respectively. Over the same period, prices of primary fibres were up by 44 per cent for softwood pulp and 47 per cent for hardwood pulp, according to COPACEL. Electricity prices in September 2021 were more than 200 per cent higher than in September 2020, reaching over €108/MWh on 15 September, the association wrote. The spectacular rise in gas prices (+300 per cent since the beginning of the year) was intensified by the very strong increase in CO­2 quotas, especially after the European Commission presented its "fit for 55” package of legislation in mid-July, which is intended to accelerate the decarbonisation of the economy.      

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