Sappi's Mill Closures in Europe Highlight Ongoing Graphic Paper Woes
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Slow markets for paper, particularly graphic paper, and high inventories were factors in wood demand in much of the world, not just in the Lake States in the third quarter. For instance, Sappi announced the formalization of a mill closing in Germany and preliminary work that could lead to a second closing in Belgium.
“These are globally challenging times and Sappi Europe is faced with overcapacity in graphic paper forcing us to take extended periods of costly commercial downtime. As the recent over-stocking by customers reduces it has become very clear that demand will not return to previous levels.” Marco Eikelenboom, CEO of Sappi Europe said. “Combined with input cost pressure, we do not see this situation, caused by factors beyond our control improving in the foreseeable future.”
The company is closing and selling its mill in Stockstadt, Germany. It also announced the start of a “consultation process on the potential closure” of the Lanaken mill in Belgium, which produces 530,000 tons of coated wood-free paper and 165,000 tons of pulp annually, according to Sappi.
The announcements in Europe parallel earlier announcements across North America that involve mill product conversions like Billerud’s planned conversion of one paper machine at its Escanaba to making boxboard in 2025.
Paper industry analysts also reported that Billerud pulled back an October paper price increase, citing soft product demand. They also reported printing paper mills operating at less than 80% of capacity through the first three quarters of 2023.
Many of the conversions in North America have been to packaging paper, cardboard, and tissue paper, where demand has been much less volatile.