Selenga mill: Containerboard prices in Russia in 2013 will grow by 11%

Ulan-Ude, January 30. Selenga pulp and board mill (located in Buryatia Republic, belongs to Continental Management holding) expects a 16% growth in containerboard sales in 2013. In value terms, growth would amount to 29%. This will be possible due to growing market capacity, replacement of closed mills and price growth, as the company said in a press release received by WhatWood.

According to predictions of Ministry for Industry and Trade, from 2013 to 2017 Russian containerboard market will grow by 4% annually. Therefore, in 2013 its capacity will increase by 35,000 tons to 1.198 million tons. Demand growth will be driven by increase in consumption of food and non-grocery goods in Russia this year by 3% and 7.6% respectively.

Last year, Russian market experienced lack of containerboard due to ceased deliveries from Bratsk LPK mill and long technical shutdowns of several leading mills. In 2013, the market will also feel lack of board. Ceased deliveries from Bratsk LPK as well upgrades at Mariyskiy and Arkhangelsk pulpmills will lead to decline in containerboard and corrugated paper production by 1.6%. As Marketing Director of Continental Management holding company Nadezhda Ryazantseva said, growth of board output announced by major players will not cover growing demand in full.

All these factors will allow the company to increase its market share from 5% to 6.5%.

Undersupply of board on the market will lead to further growth in prices. Last year, prices grew by 17%, this year the growth will reach 11% at least, as Nadezhda Ryazantseva predicts. First price hikes (3%) are expected on February 01.

Recently WhatWood reported that several market players in North America announced price hikes for February deliveries.

‘’The situation will change in 2014, when we expect a 190,000-200,000 tons growth in Russian production of containerboard. This will offset demand rise. However, in 2014 the market will face another problem, which is undersupply of wastepaper. This will retain production growth and result in wastepaper price hikes. All these factors as well as coming of another large market player, SFT Group, will lead to falling market shares of small companies. Therefore, producers of non-recycled board, including Selenga mill, will have a chance to boost sales’’, Ms. Ryazantseva said.

Last year, the company invested over 240 million Rubles into upgrades (€5.9 million). Coal boilers #5 and #7 were replaced which decreased environmental pressure and boosted energy generation. Boardmaking machine #1 was upgraded as well in order to improve board quality.