News Finnish Paperworkers’ Union extends UPM strike until April 2, 2022
While negotiations between UPM and Paperworkers’ Union continue, the union announced on Feb. 24 a three week extension to the strike at most UPM’s Finnish mills, until 2 April 2022, unless new collective labour agreements are reached before that. The mills affected by the strikes produce supercalendered paper, coated mechanical reels, coated woodfree paper, uncoated woodfree paper, specialty paper and market pulp. UPM will continue to service its customers from its mills outside of Finland to the extent possible. At this point, UPM does not disclose estimates of the economic impacts of the strikes.
Paper Prices Continue to Climb
A new price increase on coated freesheet (CFS) and coated mechanical (CM) papers announced by major producers in North America started to gain traction in February and should be fully implemented by March. The announcements vary from 4% to 12% from major coated printing paper producers including Verso, Sappi, UPM, Kruger, ND Paper, Catalyst Paper, and WillameVe Falls Paper. Overseas mills also announced price increases in the North American market this quarter at higher percentage rates. The last coated paper price increase implemented in the North American market happened in November of 2021, when prices rose $60/ton.
Impacts of the Russian Invasion of Ukraine
A flurry of announcements have been made by firms with operations in Russia and Ukraine or doing business in the countries. While not all specific to paper the ripple effects on global supply chains, exchange rates, energy, raw materials and other areas will impact most markets, including paper.
- Stora Enso announced that it would stop all production and sales in Russia until further notice due to the invasion of Ukraine. It will also halt all exports and imports to and from the country.
- UPM announced it will cease its deliveries to Russia for the time being.
- Sylvamo said it "may curtail or temporarily shut down" production at its mill in Svetogorsk, Russia later this week, because it is facing "inadequate supplies of critical raw materials."
- Leipa warned of a deterioration in truck and rail freight conditions since February 25 and said “there will be postponements, delays, and cost increases in the coming weeks.”
- Two of the world’s biggest shipping firms, Mediterranean Shipping Company and Maersk, announced they were severing ties with Russia.
- The invasion has heavily impacted cargo ships that traverse the Black Sea and exacerbated backlogs at European ports. The fallout from the war is likely to send ocean and air shipping rates skyrocketing.
- According to the European Cargo Association of International Freight Forwarders, “the Russian war against Ukraine could exacerbate the driver shortage to an extent that many supply chains will not be able to withstand.”
- RISI stated that “without a doubt, the largest impact for the European economy and the EU’s paper industry relates to energy and inflation.”
Demand and Operating Rate Forecasts (RISI)
U.S. Economy and Paper End-Use Indicators