• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

R. Balaji

Chennai , Dec. 31

PAPER manufacturers are optimistic about the outlook for 2006 as they expect the demand to remain buoyant.

Apart from the positive mood in manufacturing and exports that are expected to result in brisk demand, a major factor is that there has not been an increase in capacity in the uncoated paper segment because of which supply is bound to be tight and prices are likely to be buoyant.

On the other hand, there has been some increase in coated paper production, and newsprint production has also increased thanks to the increase in prices. Newsprint is now ruling around Rs 31,000 a tonne and realisations are better. Manufacturers who had earlier been focussing on cream wove segment have shifted to newsprint production.

These factors have eaten into the supply of printing and writing paper, contributing to tight supplies that is shoring up prices and preventing build up of inventories. It is against this backdrop that the industry is looking forward to a peak in demand from the academic segment in about a month.

While the prices of uncoated papers are on the increase, coated paper prices are being reined in by competition due to increased supplies. But coated paper manufacturers have no cause to complain as there is a bright side - the demand for coated paper is on the increase. The gap in prices between high-end uncoated papers and coated papers has come down and printers find coated paper prices attractive, say industry sources.

For instance, the prices of coated papers are ruling at around Rs 46,000 a tonne and that of high bright at Rs 43,000. Over a year ago, a gap of about Rs 10,000 was the norm, according to manufacturers.

The prime reason for the drop in coated paper prices was the entry of JK Paper into this segment. Earlier, apart from imports, the only domestic player was Ballarpur Graphics' unit in Pune.

Paper manufacturers are looking forward to the New Year, which is expected to commence with a hike in prices of uncoated papers and newsprint. But the proposed increase of about Rs 500-750 a tonne is primarily to offset the increase in cost of raw material. This is likely to be the last opportunity to offset the hike on raw material prices in 2004-05, they say.

More Stories on : Paper | rd & Newsprint

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Legal services offshoring may earn $600 m revenue by 2010

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line