Prices for thermal point-of-sale (POS) paper in October were unchanged compared with September for the fifth month in a row despite global price increase announcements by major suppliers including Hansol Paper and Koehler, according to Fastmarkets’ PPI Pulp & Paper Week survey.
Domtar, the sole thermal POS producer in North America, increased prices by 10% in June and since then has not announced any new hikes, according to industry sources.
Koehler and Hansol separately announced a 10% price increase for its thermal papers globally, effective for Oct. 1 deliveries, according to companies’ releases. The firms said the adjustments were due to higher costs for raw materials, chemicals, pulp, energy, and logistics.
Prices in September and October are stable, but they may be pushed up again in Q4 2022 and Q1 2023 due to tight thermal paper supply globally.
The contact noted that the Oct. 1 global increase announced by major suppliers is likely to be fully implemented by the end of the fourth quarter.
“Prices are stable and demand is steady, and I don’t see necessarily any changes. … But (price) increases could happen (in the coming months) due to global supply tightness,” another industry source said.
An overseas supplier noted that US demand has started to slow as customers reduce high inventory levels.
“Due to the economic situation, converters’ overall sales have been slow, and they started to reduce their order levels,” the contact said.
Another contact said that the ocean freight cost “is no longer the key issue” for Asian paper exports, since the rates started to decline, “but the domestic logistics cost in North America is a big burden for everyone in North America now.”
The list price for 48 g/m2 thermal POS paper in October was 30% higher than it was a year ago in the US and 85% higher than levels in the beginning of 2021, when producers started to implement several price increases to pass on higher freight and raw material costs.
The US price escalation that began in 2021 occurred also because of thermal POS paper capacity reductions and US anti-dumping duty (ADD) rates imposed on imports from Germany, Japan, South Korea, and Spain.
Tight supply, steady demand
Local thermal POS paper supply in the US looks firm, as Domtar’s production continues to be consistent. Domtar makes most of its thermal paper at the Marlboro, SC, mill, and ships it to the West Carrollton, OH, coating facility, which is about 500 miles from the Marlboro mill.
Contacts added that thermal POS demand is much tighter globally, especially in Europe, due to the increases in energy costs caused by the Ukraine-Russia war.
“Lecta will stop their paper production (including thermal paper) partially in Q4, and Mitsubishi is going to shut down one of their mills in Flensburg (Germany), so the supply side will become … tight in the fourth quarter and beginning of 2022,” a source said.
“Originally, there should be plenty of production capacity in Asia, especially in China, but due to the Russian demand and supply shortage in the EU, almost all the thermal paper makers are in full operation now in China,” the contact added.
European supplier Lecta on Oct. 5 revealed plans to take temporary downtime at several of its paper mills due to “very high production costs, in particular energy costs, and weaker demand primarily due to destocking in the value chain,” according to a press release. Lecta did not detail which mills and which paper grades would be impacted.
Mitsubishi Paper Mills said it would withdraw from the business at the 35,000 tonnes/yr specialty paper mill in Flensburg by the end of December, according to a PPI Europe report. The Flensburg mill makes thermal, coated inkjet, and barrier paper.
In a different direction related to production, Russia’s Borovskaya Paper Company plans to expand production of thermal paper in the Tyumen region by 20,000 tonnes/yr in the first quarter of 2023, PPI Europe reported in October.
“The new high-tech production line will make it possible to apply a thermal layer to paper and form rolls for the production of receipt tape rolls,” according to the report.