According to paper industry association Assocarta, domestic output of 9.6 million tonnes in 2021 made Italy the EU’s second largest producer after Germany. It was also in second place in terms of utilization of recovered fibre, achieving levels that had been targetted for 2030.
As regards the troubled year of 2022, challenges including increased energy costs, general inflation and transportation difficulties have had a particularly strong, negative impact since the beginning of August, resulting in quick and consistent price falls in line with repeated production stoppages by a number of paper mills. August has always been a month for equipment maintenance but these periods have been extended in many cases as a response to increased production costs and evident reluctance among transformers. Consistently high energy costs and elevated recovered fibre values have made customers significantly more cautious.
Prices of the bulk grades have fallen by around 30% from their July levels whereas deinking material have suffered to a less dramatic extent. Higher grades such as White Ledger, White 1&2 and newsprint (for which collection volumes have been very scarce) have remained generally stable and have even seen some price increases. Collections across the entire sector have witnessed a decrease over the least two months..
The severe price collapse began in earnest at the start of September when 16 of Comieco’s 36 auctions were deserted and attracted successively lower prices. Paper mills which had bought stock at the top of the market in July, and which now faced the added burden of increased energy costs, were unable to sell their production to their regular domestic customers. It should be noted that the extraordinarily high prices achieved by mixed and other bulk grades in July were essentially the result of competition among paper mills which had feared being left with insufficient stocks of recovered fibre.
There have been reports that some domestic transformers have been importing paper and board directly from abroad. And owing to the low levels of recovered fibre sales to Italian consumers, various export flows have been activated at reasonable prices to the Far East and to Turkey.
Production at Italian mills was intermittent in September regarding paper and board for packaging, although somewhat better for printing & writing and tissue. Production stoppages are also anticipated in October as a result of increasingly problematic gas supplies owing to the Ukraine conflict and its complicated economic consequences.
On top of all this, recent elections have greatly altered the composition of Italy’s Parliament. Changes of government and possibly the taking of new directions, including for the economy, are requested and expected as the country looks to face up to the many and varied problems the world presents today.