Strikes, energy costs, war, COVID and supply chain issues are all factors in the shortage of paper and are driving higher prices.
Finland based UPM is the world largest paper producer and about 2,000 UPM employees have been on strike since the 1st of January this year with around 200 union members working in areas such as heat generation and water management. A January court order directed that these critical services must remain in operation. The industrial action has led to a shortage of uncoated freesheet used in producing office paper.
Paper manufacturing is a global industry that, like others, has been impacted by the ongoing supply chain issues that has led to long delivery delays and their own increased costs. Energy is another price factor as energy costs have increased rapidly.
For European paper mills the war between Russia and Ukraine is also a factor impacting on the shortage of office paper. Russia and Ukraine are both heavily forested countries and are major producers of pulp used by the European paper mills.
The lack of pulp, combined with spiralling energy prices has meant that some European paper mills have had to reduce production.
Yesterday negotiations between UPM and the Finnish Paperworkers’ Union failed to reach an agreement on a new collective agreement and the strike has been extended to the 14th of May.
Industry analysts suggest that it could be early 2023 before paper prices start to reduce.