Paper mills have reached their peak, and actual problems will aggravate in the future

The paper market has seen a substantial growth rate in the past few years. The rise was due to the prevailing concerns regarding the implementation of sustainable, biodegradable, and eco-friendly materials. Coated duplex board, which is a paper product, attained good sights from marketers during this period and was widely used to manufacture packaging material, replacing plastic at the same time. However, the market is about to face a few challenges due to the fluctuation in prices of the raw materials and the competition exhibited by the alternative sources in the market.

The coated duplex board has shown great market performance due to its versatility. The board has a special glossy coated surface at one side that enables better printability and has a better thickness as well as strength, making it a material of high demand. The material is water-resistant and can be used for packaging purposes, as well. These key features have gained much attention in the global paper market. Moreover, the food and pharmaceutical industries have also shown interest, placing heavy orders to attain this paper product.

The high demand for coated duplex boards is driven due to their sustainability and biodegradability, which is crucial to provide packaging solutions. Coated duplex boards have provided an eco-friendly solution to rising concerns about how to maintain a plastic-free surrounding.

However, the peaked growth rate of the coated duplex board is about to face certain challenges in the upcoming days. Firstly, the unstable price range of the raw material used to manufacture coated duplex boards is one of the major concerns which would hamper the market value of this material. Secondly, the high rates of the material and the availability of alternatives in the market may also impede the growth rate in the upcoming days. Besides, the COVID-19 pandemic has already impacted the market rates and the supply chain of coated duplex boards earlier, and now, the domain seems to experience a low very soon.

The analysis attained by the Indian Paper Manufacturers Association for the year 2021-22 estimates the total market size of the coated duplex board to be around 5.233 million tonnes. The market summarizes around 4.20 million tonnes of recycled duplex board with 1.033 million tonnes of virgin duplex board products. The anticipation project the growth of the recycled segment at about 6.45% with the virgin segment at 10.10%, calculating an annual CAGR of around 7.10%.

The kraft paper domain is also showing potential growth, with a market size measuring 7.223 million tonnes. The paper market holds some of the major associations with key players such as ITC, JK, Century, Emami, N.R. Agrawal Industries, KD Pulp & Paper, Mehali Paper, and more. They play a significant role in driving the landscape and shaping the demand for coated duplex board products.

However, the recent market trends for the paper and kraft industry are showing a slowdown, with surplus availability of alternative products and declining demands in the market standing as the key challenges. Additionally, paper mills in Gujarat have been encountering hurdles in both domains, namely, recycled duplex boards and kraft paper.

It is due to the sluggish order bookings that are obtained from oversea markets. The demands attained from the oversea areas impact the decision to choose the mill’s location near the port. The cheaper availability of paper products in Taiwan, Indonesia, and other countries has affected the Indian paper market. Along with this, overcapacity in a region also puts price pressure on the manufacturers of paper products.

According to Procurement Resource, the paper industry has experienced a peak level in the global trade market in the past few years. The major challenges, including rate fluctuations, loan burdens, declining demands, and more, are now affecting the rates of paper products. The availability of cheaper alternatives from countries like Indonesia and Taiwan is impacting the Indian paper market. After making an upswing, due to great market demand, the paper market is expected to mark a low in the upcoming days.