bi weeklypaperandpaperboardsmarketintelligence transgraph 103113

7/27/2019 Bi WeeklyPaperandPaperboardsMarketIntelligence TransGraph 103113

1/9

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1

HolisticviewandprocurementstrategyforKraftpaperandduplexboardprices

ExpectedpricemovementonKraftPaperandDuplexboardprices

MillCurrent

price

1

month

23

months

Morethan

4monthsStrategyReview BuyingStrategy

AryanPaper

mills,

150GSM22BF

35000 34500 36000 34000

CompletedOct

andNovreq.at

35000.

WaitforcoveringDec

13requirement

RubyMacons

Ltd,

150GSM22BF

34000 34000 36000 34500

CompletedOct

andNovreq.at

36000.

WaitforcoveringDec

13requirement

RubyMacons

Ltd,

220GSM24BF

35500 35500 37500 36000

CompletedOct

andNovreq.at

37500.

WaitforcoveringDec

13requirement

Shakumbri

paperproducts,

150GSM22BF,

Agro

33000 33000 33500 32000

CompletedOct

andNovreq.at

32500.

WaitforcoveringDec

13requirement

Shakumbri

paperproducts,

150GSM25BF,

Agro

34500 34500 35000 33000

CompletedOct

andNovreq.at

34000.

WaitforcoveringDec

13requirement

Ruchira

papers,

150GSM22BF,

Agrobased

32500 33000 33500 31000 Completed

Oct

andNovreq.at

32500.

Waitfor

covering

Dec

13requirement

Siddeshwari

papermills

150GSM22BF,

Agro

34750 33750 35500 34000

CompletedOct

andNovreq.at

35000.

WaitforcoveringDec

13requirement

DevpriyaPaper

Products,220

GSM24BF

35000 35000 37000 36000

CompletedOct

andNovreq.at

36000.

WaitforcoveringDec

13requirement

DevpriyaPaper

Products,180

GSM22

BF

33500 33500 35500 34500

CompletedOct

andNovreq.at

34000.

WaitforcoveringDec

13requirement

Ballarpur

industries

Chromopaper,

75GSM

82750 82000 83500 82000

CompletedOct

andNovreq.at

82750.

WaitforcoveringDec

13requirement

Ballarpur

industries

Chromopaper,

90GSM

81750 81000 82500 81000

CompletedOct

andNovreq.at

81750.

WaitforcoveringDec

13requirement

AllunitsinINRperton(BasicRate)

BBii--WWeeeekkllyyPPaappeerraannddPPaappeerrbbooaarrddssMMaarrkkeettIInntteelllliiggeennccee

D e c i s i o n e n a b l i n g c a s h m a r k e t a n a l y s i s & p r i c e o u t l o o k

ForthefortnightbeginningOct31st,2013


2/9

Bi-Weekly Paper and Paperboards Market Intelligence

2

30000

32000

34000

36000

38000

Oct'12 Dec'12 Feb'13 Apr'13 Jun'13 Aug'13 Oct'13

Duplex board price t rend (INR per ton)

Gayatri Shakti (Grey back DB 260 GSM)

Gayatri Shakti (Grey back DB 285-315 GSM)

Marketrecap

Despitecontinuousappreciation in IndianRupeeand increasedsupply, festiveseasondemandhas

kept the rawmaterial prices stable in the last fortnight.Marginal rise in caustic sodapriceswere

seen

during

the

same

period

due

to

robust

demand.

Mediumtermviewonchemicalsandadditives

Rawmaterial CurrentpriceMediumterm(23

months)

Longerterm(>=4

months)

Alum,Delhi

13000

14000

12500

Rosin,Mumbai 70000 70000 70000

Causticsoda,Mumbai 31000 31000 30000

AllunitsinINRperton


3/9


3

3900

3950

4000

4050

4100

4150

4200

4250

4300

4350 ChinaPulpPriceTrend(RMB/T)

Marketanalysis

GlobalEconomy:

Weak economic releases from the US disappointed the investors sentiment during the last

fortnight.16

day

long

government

shutdown

have

weekend

the

consumer

confidence

and

resultedinlowerretailsalesandhomesalesnumber

However, US industrial production increased in September, fastest pace of rise in last seven

monthsasutilitiesoutputsurged,thoughmanufacturingshowasignofcooling

Moving forward, global financial market will be watching for monetary policy meet by major

central banks down the line after FOMC. Bank of Japan and European Central Bank are

scheduledtheirmonthlymeetincomingweek

European central bank is due for giving its economic growth forecast and statement on

monetarypolicyoncomingThursday.Weexpecttheinteresttoremainunchangedat0.5%while

growthoutlookwillremainmoderatewithimprovementinmanufacturingsectors.Likewise,we

expectBank

of

Japan

to

continue

its

asset

purchase

program

for

atarget

of

2%

inflation

USthirdquartereconomicgrowthrateislikelytoremainbelow2.5percentwhichmayindicate

another sign of sluggishness in economic growth. Other data related to income and spending

maypaintahazypictureoftheWorldslargesteconomy

Chinese data points are likely to be critical with inflation, money supply, and industrial

production,tradedataandretailssales.Weexpectmarginalgrowthinbusinessactivitieswhich

willleadtoimprovementinthementioneddatapointswhileinflationtoremainelevated

GlobalPaperIndustry:

Growingeconomicsentiments,majorlyfromChinaisexpectedtokeepthedemandupliftinnear

term. Demand in China has increased with rise in industrial and manufacturing activities in

recentpast

Metsa Fibre, Mercer International informed customers in China that its northern bleached

softwoodkraft(NBSK)marketpulppricewouldincreasebyUSD40andUSD20/tone,effective

November1

Majorboardmillsareplanning downtime

in November amid an attempt to raise

prices. Lee & Man, Nine Dragon papers

andJian

papers

are

planning

to

keep

the

plant offline in short run while it is the

prime month of board consumption. This

may give a push to paper prices in near

term

Moving forward, amid signs of stabilizing

economic growth and sharp uptick in

industrial activity, we expect some good

stockingdemandtoemergeinsomeofthe


4/9


4

majorprovinceofthecountry

Meanwhile pulp prices in Chinese market have improved marginally in last month owing to

improvingdemandwith risingmanufacturingandindustrialproduction

Chinese economy is beginning to show more and more sign of stabilizing which shall lead to

higherproduction

in

China

and

could

help

to

balance

the

market

in

the

medium

term

In Europe, demand for recovered paper has picked up in September; however supply is still

suffering fromtheseasonallyweakcollectionactivity inAugustandSeptember.Asaresultwe

expectpricestoseeupwardrevisionforseveralgrades,includingthetwobenchmarkgradesi.e.

OCCandONPgrades.

Moving forward, in a scenario of improving industrial and manufacturing activity we expect

Europeandemandtoreboundincoupleofmonths

IntheUS, Internationalpaperreportedhigherprofit inthirdquarterhelpedbystrongsalesof

corrugatedpackagingforshippingboxes

Concisely, expected increase in demand from industrial sector and tightness in raw materialavailabilitycouldresultinupwardrevisioninpricesinnextcoupleofmonths.

IndianPaperIndustry

At rawmaterial front, sugarcance crushing seasonhave already started from 15th October in

mostofthestateswhileinmaharashtramillersareexpectedtostartcrushingfrom1stweekof

November.However,ongoingtusslebetweengoernmentandsugarmills inUttarPradeshover

possibleincreaseinMSPofsugarcoulddealythecrushingseasonintheregion

Whilestartupofcrushingwill increasebagasseavailiability inthemarketthesamewillnotbe

availablefor

paper

mills

immediately

as

most

of

the

mills

will

use

intial

production

to

feed

their

captive power generation units. In addition new bagasse shall have higher moisture content

keepingpricesoffirmtoneinnextonemonth

Atanotherfront,withReserveBankofIndia(RBI)scalingdownIndia'seconomicgrowthforecast

forcurrent fiscal to5percent from theearlierprojectionof5.5percentcitingdownside risk

from domestic constraint the same is expected to impact demand from industrial sector

negativelyinthemediumterm

Whilerecentappreciation inIndiancurrecnytowards60againstUSDcouldprovidesomerelief

to Indian producers and help better their margins, increase in international recovered paper

prices

could

negate

any

scope

of

price

reduction

in

Indian

market.

Inamajordevelopmentwhichcanchangeindianpapermillsrawmaterialsouricngpatternand

aid them with better margins, WM Recycle America has chosen to strategically market its

recoveredfiberdirectlytoIndianpapermillsandconverters.Onceimplementedatfullscalethe

samecanreducedown the importpricesofmillsastheycansource thematerialdirectlyand

avoidunnecessaycostsintheprocess.

Improved margins of producers can in medium term become benificial for consumers as

producerswilltrytopassonthecostbenefitstoconsumerstoincreasetheirconsumerbase.


5/9


5

Amidrecentappreciation in Indiancurrencyand leandemandfrom industrialsectorpostfestive

seasonweexpectIndianKraftpaperandduplexboardpricestodeclinemarginallybyaroundINR

1perkginnextcoupleofmonths.

Physicalmarket

prices

Kraftpaperprices

Kraftpaperpricequotationsacrossregions(LandedCostRatesInclusiveoffreightrates)

Papermill Rawmaterial GSM BF Region Oct13 Sep13 %change

AryanPaperMillsRecycled

paper150 22 West 37999 37999 0.00

RubyMaconsLtdRecycled

paper150 22 West 36913 39085 5.56

Ruby

Macons

Ltd

Recycled

paper

220

24

West

37999

40713

6.67

ShakumbriPaper

ProductsAgrobased 150 22 North 35828 35828 0.00

ShakumbriPaper

ProductsAgrobased 150 25 North 37456 37456 0.00

RuchiraPapersRecycled

paper150 22 North 35285 35285 0.00

SiddeshwariPaper

MillsAgrobased 150 22 North 37727 38813 2.80

DevpriyaPaper

Products

Recycled

paper

220 24 North 37999 40170 5.40

DevpriyaPaper

Products

Recycled

paper180 22 North 35828 38542 7.04

ChromoPaper

Ballarpurindustries 75 West 88969 88969 0.00

ChromoPaper

Ballarpurindustries 90 West 87894 87894 0.00

Duplexboardprices

Duplexboardpricequotations(LandedCostRatesexclusiveoffreightrates)

Papermill Region Oct13 Sep13 %change

GayatriShakti,Greybackduplexboard,260GSM West 40124 41208 2.63

GayatriShakti,Greybackduplexboard300GSM West 36600 38768 5.59


6/9


6

Rawmaterialprices

Paperandpaperboardrawmaterialprices

Rawmaterial 31ST

Oct13 17th

Oct13 %Change

Chemicalsand

additives

Causticsoda,Mumbai,INRperton* 31000 31000 0.00

Rosin,Mumbai,INRperton* 70000 70000 0.00

Alum,Delhi,INRperton* 13000 13000 0.00

Causticsoda,Delhi,INRperton* 37500 37500 0.00

Pulpandrecycledpaper

Indianwastepaper,INRperton* 14153 14153 0.00

Bagassebasedpulp,INRperton* 5204 5204 0.00

EUNBSK,USDperton 887.34 882.36 0.56

USNBSK,USDperton 962.57 957.86 0.49

OCC,Euro

per

ton

111.38

110.57

0.73

ONP,Europerton 130.15 129.56 0.46

Importedwastepaper,INRperton* 20730 20730 0.00

* Monthly average prices

DetailsofIndicativecoststructurefor22BFKraftpaper(recycledpaperbased)

150GSM22BFKraftpaper(wastepaperbased)

Requirement

pertonpaperUnitcost

Total

cost

Changefrom

previousmonth

Rawmaterial(Tons) 1.12 13500 15120 731

Chemicals(tons) 0.0896 25833 231 14

Power(KWH) 450 6 2700 0

Steam(Tons) 2.5 400 1000 0

Water(Cubicmeters) 75 5.00 375 0

Maintenanceandothercosts(INR/ton) 1166 45

Processloss@10% 2059 79

Totalcostofproduction(INR/ton) 22651 870

Profitmargin(INR/Ton) 1133 43

Basicrate(INR/ton) 23784 913

Excise

Duty@

6%

1427

55

[email protected]% 32 1

Ed.andSHEdCess@3%onTotalDuty 44 2

Total 25286 971

Entrytax@5%/CST2%/VAT4% 506 19

Total 25792 990


Grossprice 25823 991

Netlanded 24352 935

AllunitsinINRperton(unit)


7/9


7

DetailsofIndicativecoststructurefor25BFKraftpaper(recycledpaperbased)

140GSM25BFKraftpaper(wastepaperbased)

Requirement

perton

paper

UnitcostTotal

cost

Changefrom

previousmonth


Chemicals(tons) 0.12 25833 310 19

Power(KWH) 475 6.00 2850 0

Steam(Tons) 2.75 400 1100 0



+Processloss@10% 2216 85



Basicrate

(INR/ton)

25600

983

ExciseDuty@6% 1536 59



Total 27216 1045


Total 27760 1066



Netlanded 26212 1006

Allunits

in

INR

per

ton

(unit)

DetailsofIndicativecoststructurefor22BFKraftpaper(Agrobased)

150GSM22BFKraftpaper(Bagassebased)

Requirement

pertonpaperUnitcost

Total

cost

Changefrom

previousmonth

Rawmaterial(tons) 3.3 5102 16837 337

Chemicals(tons) 0.396 25833 2046 127

Power(KWH) 900 6.00 5400 0

Steam(Tons)

4

400

1600

0










8/9


8


Total 34339 603


Total 35026 615

[email protected]%

42

1


Netlanded 33072 581


DetailsofIndicativecoststructurefor25BFKraftpaper(Agrobased)

140GSM25BFKraftpaper(Bagassebased)

Requirement

pertonpaperUnitcost

Total

cost

Changefrom

previousmonth


Chemicals(tons)

0.495

25833

2558

159

Power(KWH) 990 6.00 5940 0

Steam(Tons) 4 400 1600 0










Total 35936 645


Total 36654 658



Netlanded 34610 621



9/9

Discuss with our expertPhone:+914030685000

Email:[email protected]

Internet: www transgraph com

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bi weeklypaperandpaperboardsmarketintelligence transgraph 103113

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