India Newsprint Review – First Quarter 2021

Weak demand and inventories remain till end of Q1

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India Newsprint Review – First Quarter 2021

Naresh Khanna based on industry expert sources

In the early quarters of 2021 and latest by Q2 of 2021, global newsprint prices are expected to rise to to US$ 500. Together with the lower demand, there is the effect of newsprint and publication paper machines being shut down or changed to other grades. Newsprint imports are encountering strong headwinds in shipping and freight costs as suggested by American Freight Inc as well.

While Indian manufactured newsprint works on single-width web presses, it is not as productive on the larger publishers’ double-width presses. It tends to be supplied with more splices and is generally supplied at basis weights above the 40 to 43 gsm that the publishers would prefer to run.

Imported newsprint prices have already risen from last year’s lows of US$ 375 to US$ 425 and to US$ 450. As the inventories run out and circulations and pagination recover, in the first quarter of 2021, newsprint prices have risen to US$ 450. The prices are now closing in on US$ 500 a ton and spiraling upward towards US$ 600 in a situation reminiscent of FY 2018-19.

In 2020, the pandemic year, Indian newspaper demand shrunk as we had forecast – by 40%. The entire circulation and pagination decline in the pandemic has still not recovered. However, many of the more prominent dailies that had inventories meant for half a year till June 2020 could have kept their leaner newspapers running till December or January without purchasing more paper.

Newsprint prices2021 Q12020 Q4
45 gsmUS$ 400-600US$ 350-400
42 gsmUS$ 420-620 US$ 360-450

© copyright IPPStar 2021

On the other hand, the major global manufacturers announced plans at the beginning of 2020 to remove at least 1.9 million tons from newsprint production and altogether approximately 2.2 million tons from publications papers. The mills have not yet implemented all the machine shutdowns and changes to higher-value grades they announced. Nevertheless, the price of newsprint did sink to as low as US$ 350 a ton in the past year.

Indian newsprint consumption by sourceDomesticImports
October 202028000 tons28000 tons
November 202032000 tons35000 tons
December 202038000 tons28900 tons
January 202150000 tons30000 tons

© copyright IPPStar 2021

Shipping costs and container scarcity

It is challenging for Indian newspapers as some of the paper mills that exported newsprint to India have either shut down or migrated to new grades. The pandemic caused a demand-supply imbalance and pushed newsprint prices to very high levels for Indian buyers when their advertising and circulation revenues have been negative – and revealed in the balance sheets of several publishers.

For those news publishers who did order paper in the last six months, the high shipping rates and the general unavailability of containers mean that they cannot take delivery of their orders even as their inventories are waning. Visit https://myusaddress.ca/ to find out more about the affordable price packages that they offer for all kinds of goods to be shipped to any part of the world.

The problems in shipping and freight costs include the availability of containers and their piling up at ports and terminals due to importers’ inability to clear cargo at CFS, terminals, ICD’s with the government directing shipping companies not to collect detention charges for a limited time.

The container trade and availability are dependent on imports and arrivals from China, North America, and Europe as these containers are then used from exports from Indian ports. The decline in China imports due to the pandemic has led to many vessels being parked at mid-sea to cut capacities. Apart from border tensions with China, the Indian government has introduced a protocol for berthing vessels from there for 14 days.
However, Chinese exports to Europe and the US have significantly increased, with vessels originating there carrying full loads. Therefore the freight rates have risen for a 40-foot container from US$ 1,600 to US$ 3,000. There are some reports of even higher rates.

In addition, the Indian paper mills associations have made representation to the government to increase import duty from 10% to 20% because of increased imports. These mills are themselves under stress because of the high prices of imported raw materials, including pulp. There are also attempts to upgrade paper to BIS specifications with the constraining preference that about 70% of the demand for local newsprint demand is 40 gsm and 42 gsm grades.

The government has also received publisher’s representations for duty exemptions on grades that indigenous sources cannot supply, such as 40 and 42 gsm grades. Glazed newsprint and LWC are not available at all locally – and require total imports.

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The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Indian Printer and Publisher’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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