| Finnish Dock Strikes Impact UK Paper Market |
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In common with many other commodity items Paper prices have seen increases over recent months. Whilst the initial price inflation can be almost entirely attributed to the long term effect of the weakened pound against the Euro, in the last 2 months the Paper Mills have seen Pulp prices increasing by over 27%. The massive earth quake that hit Chile on 27th February 2010 has further worsened the situation. All pulp exports from Chile are being halted whilst they repair the that has been progressively reducing capacity over recent years. Historically paper prices in the UK have been amongst the lowest in Europe and for some time have been below what the Paper Mills consider to be sustainable levels. Paper Shortages in the UK will become more prevalent as the Mills push to increase prices to align the UK market to the rest of Europe and as they divert tonnage away from the UK to more profitable markets. Similar price movements and shortages being suffered in UK are also being endured now in other markets in continental Europe. The already restricted supply of product has now been further disrupted by industrial action by dock workers in Finland. Further action is also threatened by mill workers and ice breaker staff in Finland. Paper Mills have virtually no capacity for storage of finished product as a result the Mills have no choice but to halt production. The world's largest magazine paper maker UPM-Kymmene has halted paper production at its sites in Rauma, Kaukas and Kaipola. Stora Enso have been progressivley shutting down machinery in their mills since 10th March. No end-date has been announced for the strike, which observers see as a blow to the recession-hit Nordic country's economy and reputation. Around 80 percent of Finland's foreign trade travels through its ports, and industry representatives have estimated the strike is costing 110 million euros (140 million dollars) in lost exports every day. For more details see
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