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HolisticviewandprocurementstrategyforKraftpaperandduplexboardprices
ExpectedpricemovementonKraftPaperandDuplexboardprices
Mill
Current
price
1
month
23
months
Morethan
4months
StrategyReview BuyingStrategy
AryanPaper
mills,
150GSM22BF
35000 34500 36000 34000
CompletedOct
andNovreq.at
35000.
WaitforcoveringDec
13requirement
RubyMacons
Ltd,
150GSM22BF
34000 34000 36000 34500
CompletedOct
andNovreq.at
36000.
WaitforcoveringDec
13requirement
RubyMacons
Ltd,
220GSM24BF
35500 35500 37500 36000
CompletedOct
andNovreq.at
37500.
WaitforcoveringDec
13requirement
Shakumbri
paperproducts,
150GSM22BF,
Agro
33000 33000 33500 32000
CompletedOct
andNovreq.at
32500.
WaitforcoveringDec
13requirement
Shakumbri
paperproducts,
150GSM25BF,
Agro
34500 34500 35000 33000
CompletedOct
andNovreq.at
34000.
WaitforcoveringDec
13requirement
Ruchirapapers,
150GSM22BF,
Agrobased
32500 33000 33500 31000
CompletedOct
andNovreq.at
32500.
WaitforcoveringDec
13requirement
Siddeshwari
papermills
150GSM22BF,
Agro
34750 33750 35500 34000
CompletedOct
andNovreq.at
35000.
WaitforcoveringDec
13requirement
DevpriyaPaper
Products,220
GSM24BF
35000 35000 37000 36000
CompletedOct
andNovreq.at
36000.
WaitforcoveringDec
13requirement
DevpriyaPaper
Products,180
GSM22BF
33500 33500 35500 34500
CompletedOct
andNovreq.at
34000.
WaitforcoveringDec
13requirement
Ballarpur
industries
Chromopaper,
75GSM
82750 82000 83500 82000
CompletedOct
andNovreq.at
82750.
WaitforcoveringDec
13requirement
Ballarpur
industries
Chromopaper,
90GSM
81750 81000 82500 81000
CompletedOct
andNovreq.at
81750.
WaitforcoveringDec
13requirement
AllunitsinINRperton(BasicRate)
B Bi i- -W We ee ek kl ly y P Pa ap pe er r a an nd d P Pa ap pe er rb bo oa ar rd ds s M Ma ar rk ke et t I In nt te el ll li ig ge en nc ce e
De c i s i on e nabl i ng c as h mar ke t anal ys i s & pr i c e out l ook
ForthefortnightbeginningOct31st,2013
Bi-Weekly Paper and Paperboards Market Intelligence

30000
32000
34000
36000
38000
Oct'12 Dec'12 Feb'13 Apr'13 J un'13 Aug'13 Oct'13
Duplex board price trend (INR per ton)
Gayatri Shakti (Grey back DB 260 GSM)
Gayatri Shakti (Grey back DB 285-315 GSM)

Marketrecap

Despite continuous appreciation in Indian Rupee and increased supply, festive season demand has
kept the raw material prices stable in the last fortnight. Marginal rise in caustic soda prices were
seenduringthesameperiodduetorobustdemand.

Mediumtermviewonchemicalsandadditives
Rawmaterial Currentprice
Mediumterm(23
months)
Longerterm(>=4
months)
Alum,Delhi 13000 14000 12500
Rosin,Mumbai 70000 70000 70000
Causticsoda,Mumbai 31000 31000 30000
AllunitsinINRperton
Bi-Weekly Paper and Paperboards Market Intelligence

3900
3950
4000
4050
4100
4150
4200
4250
4300
4350
ChinaPulpPriceTrend(RMB/T)
Marketanalysis

GlobalEconomy:
Weak economic releases from the US disappointed the investors sentiment during the last
fortnight. 16day long government shutdown have weekend the consumer confidence and
resultedinlowerretailsalesandhomesalesnumber
However, US industrial production increased in September, fastest pace of rise in last seven
monthsasutilitiesoutputsurged,thoughmanufacturingshowasignofcooling
Moving forward, global financial market will be watching for monetary policy meet by major
central banks down the line after FOMC. Bank of Japan and European Central Bank are
scheduledtheirmonthlymeetincomingweek
European central bank is due for giving its economic growth forecast and statement on
monetarypolicyoncomingThursday.Weexpecttheinteresttoremainunchangedat0.5%while
growthoutlookwillremainmoderatewithimprovementinmanufacturingsectors.Likewise,we
expectBankofJapantocontinueitsassetpurchaseprogramforatargetof2%inflation
USthirdquartereconomicgrowthrateislikelytoremainbelow2.5percentwhichmayindicate
another sign of sluggishness in economic growth. Other data related to income and spending
maypaintahazypictureoftheWorldslargesteconomy
Chinese data points are likely to be critical with inflation, money supply, and industrial
production,tradedataandretailssales.Weexpectmarginalgrowthinbusinessactivitieswhich
willleadtoimprovementinthementioneddatapointswhileinflationtoremainelevated

GlobalPaperIndustry:

Growingeconomicsentiments,majorlyfromChinaisexpectedtokeepthedemandupliftinnear
term. Demand in China has increased with rise in industrial and manufacturing activities in
recentpast
Metsa Fibre, Mercer International informed customers in China that its northern bleached
softwoodkraft(NBSK)marketpulppricewouldincreasebyUSD40andUSD20/tone,effective
November1
Major board mills are planning downtime
in November amid an attempt to raise
prices. Lee & Man, Nine Dragon papers
and Jian papers are planning to keep the
plant offline in short run while it is the
prime month of board consumption. This
may give a push to paper prices in near
term
Moving forward, amid signs of stabilizing
economic growth and sharp uptick in
industrial activity, we expect some good
stockingdemandtoemergeinsomeofthe
Bi-Weekly Paper and Paperboards Market Intelligence

majorprovinceofthecountry
Meanwhile pulp prices in Chinese market have improved marginally in last month owing to
improvingdemandwithrisingmanufacturingandindustrialproduction
Chinese economy is beginning to show more and more sign of stabilizing which shall lead to
higherproductioninChinaandcouldhelptobalancethemarketinthemediumterm
In Europe, demand for recovered paper has picked up in September; however supply is still
suffering from the seasonally weak collection activity in August and September. As a result we
expectpricestoseeupwardrevisionforseveralgrades,includingthetwobenchmarkgradesi.e.
OCCandONPgrades.
Moving forward, in a scenario of improving industrial and manufacturing activity we expect
Europeandemandtoreboundincoupleofmonths
In the US, International paper reported higher profit in third quarter helped by strong sales of
corrugatedpackagingforshippingboxes

Concisely, expected increase in demand from industrial sector and tightness in raw material
availabilitycouldresultinupwardrevisioninpricesinnextcoupleofmonths.

IndianPaperIndustry

At raw material front, sugarcance crushing season have already started from 15th October in
mostofthestateswhileinmaharashtramillersareexpectedtostartcrushingfrom1
st
weekof
November. However, ongoing tussle between goernment and sugar mills in Uttar Pradesh over
possibleincreaseinMSPofsugarcoulddealythecrushingseasonintheregion
While startup of crushing will increase bagasse availiability in the market the same will not be
availableforpapermillsimmediatelyasmostofthemillswilluseintialproductiontofeedtheir
captive power generation units. In addition new bagasse shall have higher moisture content
keepingpricesoffirmtoneinnextonemonth
Atanotherfront,withReserveBankofIndia(RBI)scalingdownIndia'seconomicgrowthforecast
for current fiscal to 5 per cent from the earlier projection of 5.5 per cent citing downside risk
from domestic constraint the same is expected to impact demand from industrial sector
negativelyinthemediumterm
While recent appreciation in Indian currecny towards 60 againstUSD could provide some relief
to Indian producers and help better their margins, increase in international recovered paper
pricescouldnegateanyscopeofpricereductioninIndianmarket.
Inamajordevelopmentwhichcanchangeindianpapermillsrawmaterialsouricngpatternand
aid them with better margins, WM Recycle America has chosen to strategically market its
recoveredfiberdirectlytoIndianpapermillsandconverters.Onceimplementedatfullscalethe
same can reduce down the import prices of mills as they can source the material directly and
avoidunnecessaycostsintheprocess.
Improved margins of producers can in medium term become benificial for consumers as
producerswilltrytopassonthecostbenefitstoconsumerstoincreasetheirconsumerbase.

Bi-Weekly Paper and Paperboards Market Intelligence

Amid recent appreciation in Indian currency and lean demand from industrial sector post festive
seasonweexpectIndianKraftpaperandduplexboardpricestodeclinemarginallybyaroundINR
1perkginnextcoupleofmonths.

Physicalmarketprices
Kraftpaperprices

Kraftpaperpricequotationsacrossregions(LandedCostRatesInclusiveoffreightrates)
Papermill Rawmaterial GSM BF Region Oct13 Sep13 %change
AryanPaperMills
Recycled
paper
150 22 West 37999 37999 0.00
RubyMaconsLtd
Recycled
paper
150 22 West 36913 39085 5.56
RubyMaconsLtd
Recycled
paper
220 24 West 37999 40713 6.67
ShakumbriPaper
Products
Agrobased 150 22 North 35828 35828 0.00
ShakumbriPaper
Products
Agrobased 150 25 North 37456 37456 0.00
RuchiraPapers
Recycled
paper
150 22 North 35285 35285 0.00
SiddeshwariPaper
Mills
Agrobased 150 22 North 37727 38813 2.80
DevpriyaPaper
Products
Recycled
paper
220 24 North 37999 40170 5.40
DevpriyaPaper
Products
Recycled
paper
180 22 North 35828 38542 7.04
ChromoPaper
Ballarpurindustries
75 West 88969 88969 0.00
ChromoPaper
Ballarpurindustries
90 West 87894 87894 0.00

Duplexboardprices

Duplexboardpricequotations(LandedCostRatesexclusiveoffreightrates)
Papermill Region Oct13 Sep13 %change
GayatriShakti,Greybackduplexboard,260GSM West 40124 41208 2.63
GayatriShakti,Greybackduplexboard300GSM West 36600 38768 5.59

Bi-Weekly Paper and Paperboards Market Intelligence

Rawmaterialprices

Paperandpaperboardrawmaterialprices
Rawmaterial 31
ST
Oct13 17
th
Oct13 %Change
Chemicalsandadditives
Causticsoda,Mumbai,INRperton* 31000 31000 0.00
Rosin,Mumbai,INRperton* 70000 70000 0.00
Alum,Delhi,INRperton* 13000 13000 0.00
Causticsoda,Delhi,INRperton* 37500 37500 0.00
Pulpandrecycledpaper
Indianwastepaper,INRperton* 14153 14153 0.00
Bagassebasedpulp,INRperton* 5204 5204 0.00
EUNBSK,USDperton 887.34 882.36 0.56
USNBSK,USDperton 962.57 957.86 0.49
OCC,Europerton 111.38 110.57 0.73
ONP,Europerton 130.15 129.56 0.46
Importedwastepaper,INRperton* 20730 20730 0.00
* Monthly average prices

DetailsofIndicativecoststructurefor22BFKraftpaper(recycledpaperbased)
150GSM22BFKraftpaper(wastepaperbased)

Requirement
pertonpaper
Unitcost
Total
cost
Changefrom
previousmonth
Rawmaterial(Tons) 1.12 13500 15120 731
Chemicals(tons) 0.0896 25833 231 14
Power(KWH) 450 6 2700 0
Steam(Tons) 2.5 400 1000 0
Water(Cubicmeters) 75 5.00 375 0
Maintenanceandothercosts(INR/ton) 1166 45
Processloss@10% 2059 79
Totalcostofproduction(INR/ton) 22651 870
Profitmargin(INR/Ton) 1133 43
Basicrate(INR/ton) 23784 913
ExciseDuty@6% 1427 55
Cess@0.125% 32 1
Ed.andSHEdCess@3%onTotalDuty 44 2
Total 25286 971
Entrytax@5%/CST2%/VAT4% 506 19
Total 25792 990
Insurance@0.121% 31 1
Grossprice 25823 991
Netlanded 24352 935
AllunitsinINRperton(unit)
Bi-Weekly Paper and Paperboards Market Intelligence

DetailsofIndicativecoststructurefor25BFKraftpaper(recycledpaperbased)
140GSM25BFKraftpaper(wastepaperbased)

Requirement
pertonpaper
Unitcost
Total
cost
Changefrom
previousmonth
Rawmaterial(Tons) 1.2 13500 16200 784
Chemicals(tons) 0.12 25833 310 19
Power(KWH) 475 6.00 2850 0
Steam(Tons) 2.75 400 1100 0
Water(Cubicmeters) 90 5.00 450 0
Maintenanceandothercosts(INR/ton) 1255 48
+Processloss@10% 2216 85
Totalcostofproduction(INR/ton) 24381 936
Profitmargin(INR/Ton) 1219 47
Basicrate(INR/ton) 25600 983
ExciseDuty@6% 1536 59
Cess@0.125% 34 1
Ed.andSHEdCess@3%onTotalDuty 46 2
Total 27216 1045
Entrytax@5%/CST2%/VAT4% 544 21
Total 27760 1066
Insurance@0.121% 34 1
Grossprice 27794 1067
Netlanded 26212 1006
AllunitsinINRperton(unit)

DetailsofIndicativecoststructurefor22BFKraftpaper(Agrobased)
150GSM22BFKraftpaper(Bagassebased)

Requirement
pertonpaper
Unitcost
Total
cost
Changefrom
previousmonth
Rawmaterial(tons) 3.3 5102 16837 337
Chemicals(tons) 0.396 25833 2046 127
Power(KWH) 900 6.00 5400 0
Steam(Tons) 4 400 1600 0
Water(Cubicmeters) 100 5.00 500 0
Maintenanceandothercosts(INR/ton) 1583 28
Processloss@10% 2797 49
Totalcostofproduction(INR/ton) 30762 540
Profitmargin(INR/Ton) 1538 27
Basicrate(INR/ton) 32300 567
ExciseDuty@6% 1938 34
Cess@0.125% 43 1
Bi-Weekly Paper and Paperboards Market Intelligence

Ed.andSHEdCess@3%onTotalDuty 58 1
Total 34339 603
Entrytax@5%/CST2%/VAT4% 687 12
Total 35026 615
Insurance@0.121% 42 1
Grossprice 35068 616
Netlanded 33072 581
AllunitsinINRperton(unit)

DetailsofIndicativecoststructurefor25BFKraftpaper(Agrobased)
140GSM25BFKraftpaper(Bagassebased)

Requirement
pertonpaper
Unitcost
Total
cost
Changefrom
previousmonth
Rawmaterial(Tons) 3.3 5102 16837 337
Chemicals(tons) 0.495 25833 2558 159
Power(KWH) 990 6.00 5940 0
Steam(Tons) 4 400 1600 0
Water(Cubicmeters) 135 5.00 675 0
Maintenanceandothercosts(INR/ton) 1657 30
Processloss@10% 2927 52
Totalcostofproduction(INR/ton) 32192 577
Profitmargin(INR/Ton) 1610 29
Basicrate(INR/ton) 33802 606
ExciseDuty@6% 2028 36
Cess@0.125% 45 1
Ed.andSHEdCess@3%onTotalDuty 61 1
Total 35936 645
Entrytax@5%/CST2%/VAT4% 719 13
Total 36654 658
Insurance@0.121% 44 1
Grossprice 36699 658
Netlanded 34610 621
AllunitsinINRperton(unit)

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