Consumables

2.7-3.5 Million Tonnes of Coated Paper Capacity to Close in Europe by 2015

Tuesday 21. December 2010 - Current overcapacity in European coated papers market at 1.2 million tonnes Western European demand for coated papers has matured and the post recession rebound in demand is over. According to RISI's new European Coated Papers Risk of Closure Study, overcapacity of both coated woodfree and coated mechanical papers has reached 1.2 million tonnes, lowering prices and affecting producer profitability in Europe.

With coated woodfree capacity in
China forecast to exceed domestic demand by the end of 2011 and new capacity
in Russia, export prospects of Western European coated paper producers are
threatened and capacity closures of 2.7-3.5 million tonnes are expected by
2015.
“Coated paper mills are currently operating at a loss in Europe. To
maintain profitability, prices will have to rise and capacity needs to be
balanced, through closures,” said Sampo Timonen, Director of European Graphic
Papers at RISI, and author of the study.
Timonen analysed ninety paper machines and twenty producers for this
study and created a methodology that compares company and machine risk
against the industry average using a range of criteria – financials,
long-term cost position and the strategies of coated woodfree and coated
mechanical producers in Europe – to evaluate the machines most likely to
close on a permanent basis. The European Coated Papers Risk of Closure Study
analyses machine risk of closure by company, indicating machines likely to
face proactive closure, potential divestments and closures due to bankruptcy.