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Friday, Nov 05, 2004

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Paper prices set to rise again by Jan

Anil Sasi

New Delhi , Nov. 4

THE domestic paper industry could be in for another round of surge in prices around January next year.

Despite the two rounds of price increases earlier this year, industry players concur that coated paper prices have still not peaked and prices are expected to see another round of churning by the end of this year or by early next year, in line with rising international prices.

According to domestic players, paper prices are being driven by the strong demand for the product and due to the resurgence in prices in the overseas markets. The demand-supply mismatch is also because there has not been much capacity addition in the domestic market over the last four years and manufacturers have resorted to de-bottlenecking to increase output.

International prices of coated paper are on the rise due to the recent increase in pulp prices, domestic players said, adding that the import prices of pulp and waste paper have been going up due to the tight supply situation.

"In the case of coated paper, the increase in domestic paper prices generally follows international trends. So another round of hikes is in the offing, more so since the pulp prices continue to rise. With pulp prices remaining above $400 per tonne, paper prices would continue to be high," said an industry player.

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