Market players believe that the latest price development will accelerate industry restructuring and lead to more capacity closures for newsprint and magazine paper.
Newsprint and magazine paper prices reached hit rock bottom at the start of 2021: The latest price round for deliveries as of January 2021 resulted in historically low prices on the markets in Germany and Italy. Amidst the supply overhang and the fierce battle for volumes waged by the paper mills, both buyers and sellers say that prices tumbled even more than had been expected.
One unusual development in this price round in Germany was that the delivery agreements for newsprint were valid for differing lengths of time. In light of the low prices, paper mills were often pushing for half-year contracts. There are also quarterly contracts for headset newsprint, it is said.
sources in Italy said that annual contracts had also been signed for newsprint in several instances with buyers paying little or no upcharge compared to contracts with shorter price validity terms.
In Italy, paper buyers were not always happy to see the prices plunge that low. Printers and especially publishers are worried that they might have to pay dearly for this once the market stabilizes again, and more capacity closures and companies going out of business put the power in the hands of a few big suppliers.
source:euwid
