navitor.com 4 Mills and Manufacturers Sappi accepted an offer to sell three European graphic paper mills to focus on other segments, including packaging and specialty papers, pulp, and bio materials. Neenah announced an expanded moratorium on key grades, specifically index and tag. Neenah also continued to discontinue SKUs to focus on their premium grades. Fedrigoni and Mohawk forged a manufacturing partnership. Pixelle Specialty Solutions announced the closure of the Jay, Maine mill to take place in Q1 2023. This mill produces specialty label and release papers, as well as industrial and packaging solutions for e-commerce and food service. Capacity removed will be 230,000 tons annually. Stora Enso will divest four paper mill sites to focus on strategic growth areas. ND Paper is rationing grades and weights and discontinuing their Escanaba brand. Shipping and Distribution Ongoing shipping and distribution issues continue and warehouse capacity remains at a premium. Mill price increases and freight and fuel surcharge announcements continue in October. Thermal Paper Thermal paper costs are at an all-time high and the record price increases are not expected to slow down soon. Thermal mills are running at 100% capacity. End-users are ordering much more volume than in previous years. Their reasoning is to hedge against future price increases and prevent future supply outages. This habit seems to be slowing, which could reduce demand from paper mills. However, the political environment with China is heating up. China supplies most of the chemicals for the thermal coatings. As to such, there will most likely be a price increase before the end of 2022. Envelopes The envelope industry continues to face significant pricing pressures, inflation, and raw material and labor shortages. Supply chain problems and paper allocations continue to plague the industry. These conditions are expected to continue throughout Q4 of 2022 and into 2023. Backlogs are very tight going into Q4, which is traditionally the busiest time of the year for the industry. PAPER MARKET October 2022 Though there have been reductions, demand is still outstripping supply on all grades. This continues to create an allocated and oversold market where securing paper and delivering it on time remains an overwhelming challenge. Compromises will continue to have to be made on a daily basis.
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