Lazlow
OzCardTrader
Another thing to also keep in mind is the upheaval in the paper industry, which has caused paper prices to rapidly increase.
First COVID created a shift away from paper, with the rapid uptake of digital services to reduce touch points and potential transmission. Even the humble restaurant menu was replaced with a QR code patrons could scan so they could look at a menu on their phone. This lead to a 20% reduction in demand for paper stocks, and paper production was scaled back.
The eCommerce boom that was also seen during this period created an increase demand for packaging, which saw a production switch which further reduced the mill capacity for paper. Packaging stock prices went up 25% during this period.
Stora Enso in Finland closed two of its paper mills, and focused on cardboard and biomaterials due to these changing trends.
Post-COVID saw a rapid uptake in demand for paper, which drove prices up due to the reduced production and supply during COVID.
Then you had UPM (another major paper mill in Europe) workers go on strike in Finland for about 112 days last year. UPM workers were joined by the transport workers who blockaded the paper mills, and this all created a massive disruption to supply chains. Most of Australia's major printers were scrambling to sure up paper stocks to see out production, and its a disruption that flowed into 2023, with another strike by Finnish transport workers.
Ultimately the price of wood pulp has increased 80% since 2020. Add to this the increase costs of energy and shipping rates. Even the Chinese printers who undercut everyone couldn't escape these disruptions.
First COVID created a shift away from paper, with the rapid uptake of digital services to reduce touch points and potential transmission. Even the humble restaurant menu was replaced with a QR code patrons could scan so they could look at a menu on their phone. This lead to a 20% reduction in demand for paper stocks, and paper production was scaled back.
The eCommerce boom that was also seen during this period created an increase demand for packaging, which saw a production switch which further reduced the mill capacity for paper. Packaging stock prices went up 25% during this period.
Stora Enso in Finland closed two of its paper mills, and focused on cardboard and biomaterials due to these changing trends.
Post-COVID saw a rapid uptake in demand for paper, which drove prices up due to the reduced production and supply during COVID.
Then you had UPM (another major paper mill in Europe) workers go on strike in Finland for about 112 days last year. UPM workers were joined by the transport workers who blockaded the paper mills, and this all created a massive disruption to supply chains. Most of Australia's major printers were scrambling to sure up paper stocks to see out production, and its a disruption that flowed into 2023, with another strike by Finnish transport workers.
Ultimately the price of wood pulp has increased 80% since 2020. Add to this the increase costs of energy and shipping rates. Even the Chinese printers who undercut everyone couldn't escape these disruptions.
