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Unexpectedly, in a conflict between Russia and Ukraine, the first to be beaten is the European paper industry.
On April 28, CPEI (Confederation of the European Paper Industry) issued a tragic announcement in Brussels. "Due to extreme energy prices caused by the "Russian invasion of Ukraine (sic)", our factories had to make the difficult decision to temporarily suspend production across Europe, the announcement said.
CEPI is an association representing the European pulp and paper industry with a membership of approximately 895 pulp, paper and board mills in the 18 EU member states. In the report to the European Commission, CPEI states: "Reducing the functioning of our industry is a real threat to our competitiveness in the global marketplace. Our industry has been facing high energy costs since the summer of 2021. For a few months now, we have seen energy prices continue to be high, even increasing by as much as 8 times. Existing forecasts suggest conditions are unlikely to improve in the coming months. The lasting impact of the ongoing war crisis and the recent collapse of the energy system is deeply worrying. It jeopardizes our industrial presence in Europe, let alone the ability to invest in further industrial transformation by 2030 to meet climate goals.
The CPEI appealed to the European Commission, expecting the European policy framework to promote a series of solutions such as "guaranteing the supply of natural gas for industrial use, introducing gas reserve schemes, and ensuring the availability of natural gas at affordable costs":
Pressing the pause button for the entire European paper industry is a terrible blow to the industry. In the next few days, the paper packaging industry, toilet and medical paper products, and even the newspaper and book industries will face a production crisis.
According to Bruno Zago, CEO of Italy's PRO-GEST Paper Group, according to the current energy price, not only can companies not make a profit in producing a ton of paper, they will also lose money. From March 1, the cost per ton of paper has increased by 50 euros, and after March 15, it will increase by another 100 euros to 750 euros, he said. Before the energy crisis, the production cost of a ton of recycled paper was only 300 euros.
However, this is undoubtedly a big positive for China's papermaking industry, which is mired in overcapacity and weak domestic demand. Since the fourth quarter of 2021, the export business of my country's papermaking and paper products has shown a rapid growth trend, with a year-on-year growth rate of more than 10% for three consecutive months. The monthly export value is the highest.
According to the recent understanding of Mantan Paper in the market, affected by the closure and conversion of European cultural paper factories, UPM strikes and the conflict between Russia and Ukraine, Europe has shown a situation of insufficient paper supply as a whole, and foreign inquiries have soared. Cardboard, carbonless copy paper and related paper products have become the main export products, and the export orders of enterprises with export product standard certification have been saturated.
Chenming Paper, a leading company in the industry, said on the investor interactive platform on April 20 that the company's exports accounted for between 10% and 20% of its sales. Affected by factors such as the epidemic, rising foreign energy prices, and the entry into force of the RCEP agreement, export sales have increased significantly compared with the previous period, which has played a positive role in the improvement of the company's performance.
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