Recent weeks have also seen price rises for best grades such as white letter – office white paper – with the mill price rising by about 15 to 115. This rise is linked partly to an increase in the price of pulp which up by about $40.
Merchants continue to keep a watch on the political situation in the Middle East. Should a war start, additional insurance premiums could add 10 a tonne to the price of paper exports because shipping needs to use the Suez Canal. But, higher prices would weaken Far Eastern demand so there remains uncertainty as to what the consequences would turn out to be.
However, already some UK exporters are finding some containers have been taken off ships because they are needed by the military.
Exporters are also faced with a general rate increase in freight costs which has seen margins trimmed by a few pounds a tonne.
For March there is some expectation that Europe gets into a busier manufacturing period that demand will strengthen and prices for old-KLS and middle grades will move up.
A typical view from the mill sector came recently from SCA. The company said: “Demand for the Group’s consumer-related products has remained favorable in the beginning of 2003, but consumer tissue is affected by continued strong competitive pressure.
The company added: “The situation is more difficult to assess for areas dependent on development in the industrial sector. It should be noted, however, that price levels for converted packaging materials are relatively stable and prices for recycled fibre are believed to have bottomed out. Substantial improvements in the European printing paper segment are contingent on a general improvement in advertising trends.”
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