SWM International recently announced price increases of up to 15% across its engineered papers portfolio, effective July 1st. The increases are a direct result of sharp rises in raw material prices, with market wood pulp costs up by 50% in the past six months.
Largely because of the COVID-19 pandemic, 2020 saw a lower-than-expected demand for wood pulp and higher inventory levels. Since Q4 2020, demand in Asia has recovered strongly, driving inflation and a fast decrease in global inventory levels. Supply levels have turned toward Asia, leading to one of the sharpest price increases in recent history.
In addition, polymer prices and packaging material costs remain highly volatile. At the same time, shipping companies are capitalizing on high demand following periods of congestion to leverage their pricing power, as well as providing limited visibility on freight rates and special surcharges.
Katrin Hanske, General Manager / Vice President Tobacco & Alternative Solutions at SWM, commented, “As demonstrated during the COVID crisis, SWM always gives top priority to its customers: to securing continuity of operations and supply, and delivering the highest-quality service across the world. In the past months, we have strengthened our business continuity management and made every effort to mitigate the impact of raw material price increases. Nevertheless, with no near-term relief in sight, we cannot continue to absorb those extra costs and therefore an increase in our selling prices is crucial to sustaining capacity, the quality of our products and services, and ensuring seamless supply continuity to customers. Our commercial team will engage directly with all our customers considering specific product line and account situations.”
SWM is a leading global performance materials company, focused on bringing best-in-class innovation, design, and manufacturing solutions to our customers. SWM’s highly engineered films, adhesive tapes, foams, nets, nonwovens, and papers are designed and manufactured using resins, polymers, and natural fibers for a variety of industries and specialty applications.