Paper is an essential commodity for our society. It packages goods, it carries confidential Army orders, it wraps our food, and it prints our magazines and newspapers. But now, the paper manufacturing industry and packaging researchers are warning us of a global shortage of paper, and increased prices in the face of rising demand.
The paper industry has hit a storm of increased demand, fuelled by the growth of the e-commerce industry, and an increasing amount of shelf-ready packaging.
“UK buyers have had three price rises in corrugated over the last 12 months and it looks like a fourth increase is likely during this first quarter of 2018,” said Neil Osment, Managing Director of NOA-PRISM.
The need for corrugated packaging has grown by 2%, every year for the last three years, with no signs of an increase in supply for Kraft paper liners. The global demand for the corrugated board has seen a huge upsurge, growing on average at 3.3% per year from 200 billion square meters (BSM) in 2011 to almost 236 BSM in 2016.
Last year in China, between August and November, the average price of corrugated paper increased from 2,700 Yuan per ton to 4,200 Yuan per ton.
Paper manufacturers asked customers to expect lower supplies, with a price hike due to environmental reasons. Chinese chemical supplier – Connect Chemicals’ plant in China is to be shut, being the world’s largest producer of thermal paper coating. It supplies around 50% of worldwide demand and 80-85% of the Asian market, and it was expected to stay shut for three months.
Paper Shortage Hits the Paper Manufacturing Industry
Many small businesses in the paper manufacturing industry have closed down since 2014, mostly affecting China, including more than 70 firms in Guangdong and over 100 in the provinces of Shandong, Zhejiang, and Jiangsu. According to analysts, more paper manufacturers are expected to close down in the future due to air pollution further deteriorating the mainland.
Short paper supply prompted manufacturers to start looking for other carton paper suppliers in different provinces. But, with new transport regulations, which came into effect last October, have resulted in carton paper cost increased by 200 to 300 Yuan per ton. This affected the purchasing and selling the power of many suppliers and manufacturers.
Future advancements with respect to Environmental changes
Nowadays, manufacturers have started using a more environmentally friendly alternative to expand packaging. Paper Foam, made from paper, is a new packaging technique and has properties very similar to some expanded plastic packaging. It is biodegradable and can be recycled with ordinary paper.
With environmental concerns about synthetic coating and high prices of hydro-carbon based petro-chemicals, zein emerged as a coating for paper in high grease applications.
Synthetics such as Tyvek and Teslin have been introduced as printing media, and as a more durable material than paper.
If you have paper requirements, we offer personalized solutions to your paper needs and are happy to discuss the same. Contact us at [email protected] to get more information.