The beginning of 2024 witnessed a series of unexpected developments within the pulp and paper industry, creating rippling impacts across the sector. From labor and major industrial accidents at pivotal mills to a noticeable decline in production and a jump in market prices, the landscape experienced a whirlwind of change.
This recap will explore crucial factors affecting the pulp and paper industry in the first quarter of 2024.
The Finnish pulp and paper sector faced a familiar challenge in the early months of the year. Commencing on March 11, a series of labor strikes significantly disrupted operations, affecting major industry players such as Stora Enso, UPM, and Metsä Group. These strikes, lasting two weeks, resulted in production stoppages and logistics disarray. The disruptions caused a standstill in both raw material supplies and finished product deliveries.
This halt impacted the paper industry's supply chain on both a domestic and international level. However, as quarter-end approached, Finnish trade unions tentatively halted their strike actions to facilitate a path forward. The move hints at possible resolutions and a return to normalcy. This pause does come with its own set of uncertainties, leaving the recovery trajectory of the sector in a delicate balance.
Adding to these challenges was the unfortunate incident at the Kemi bioproduct mill – an explosion that significantly halted Finland’s pulp production activities. With the supply of NBSK pulp constrained, the industry must find other avenues to make up for this loss.
The rocky state of the global economy is nothing new. However, it is still creating market shifts in various areas of the industry, such as the availability of raw materials and changes in consumer behavior.
ResourceWise's Recycled Fiber 360 platform indicated that US market fiber prices experienced a significant increase during the first quarter of 2024 compared to 2023 with prices doubling.
US Market Fiber Prices
Source: Recycled Fiber 360
Additionally, the American Forest & Paper Association (AF&PA) reported that the total number of US printing-writing paper shipments decreased by 9% in January 2024 compared to January 2023. Total printing-writing paper inventory levels decreased by 1% compared to December 2023. Individually, US shipments in all three major printing-writing categories of uncoated free sheet, coated free sheet, and mechanical decreased in January 2024 compared to a year ago.
AF&PA also reported US packaging papers and specialty packaging shipments in January 2024 decreased by 4% compared to January 2023. Shipments of the bag and sack subgrade in unbleached packaging papers were 92,900 short tons for January 2024, down 1.1% from a year ago.
As we navigate through the aftermath of the first quarter, we are faced with both challenges and opportunities within the pulp and paper industry. The strategic decisions taken in response to these recent challenges will not only shape the industry's trajectory but also influence its market dynamics for years to come.
It is vital to remain updated on the latest occurrences and advancements in the pulp and paper industry. Staying informed is key to being prepared to navigate and excel in this constantly changing environment. Don't miss out on any stories - subscribe to our weekly blog newsletter today.