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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2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels 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. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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