European paper industry under energy crisis
Beginning in the second half of 2021, especially since 2022, rising raw material and energy prices have put the European paper industry in a vulnerable state, exacerbating the closure of some small and medium-sized pulp and paper mills in Europe. In addition, the rise in paper prices has also had a profound impact on downstream printing, packaging and other industries.
Conflict between Russia and Ukraine exacerbates energy crisis of European paper companies
Since the conflict between Russia and Ukraine broke out in early 2022, many leading paper companies in Europe have announced their withdrawal from Russia. In the process of withdrawing from Russia, the company also consumed huge costs such as manpower, material resources and financial resources, which broke the original strategic rhythm of the company. With the deterioration of Russian-European relations, Russian natural gas supplier Gazprom decided to significantly reduce the volume of natural gas supplied to the European continent through the Nord Stream 1 pipeline. Industrial enterprises in many European countries can only take various measures. ways to reduce natural gas usage.
Since the outbreak of the Ukraine crisis, the “North Stream” natural gas pipeline, which is the main energy artery of Europe, has been attracting attention. Recently, the three branch lines of the Nord Stream pipeline have suffered “unprecedented” damage at the same time. The damage is unprecedented. It is impossible to restore the gas supply. predict. The European paper industry is also deeply affected by the resulting energy crisis. Temporary suspension of production, reduction of production or transformation of energy sources have become common countermeasures for European paper companies.
According to the 2021 European Paper Industry Report released by the European Confederation of the Paper Industry (CEPI), the major European paper and cardboard producing countries are Germany, Italy, Sweden and Finland, among which Germany is the largest producer of paper and cardboard in Europe. Accounting for 25.5% in Europe, Italy is 10.6%, Sweden and Finland account for 9.9% and 9.6% respectively, and the output of other countries is relatively small. It is reported that in order to ensure energy supply in key areas, the German government is considering taking extreme measures to reduce energy supply in some areas, which may lead to the closure of factories in many industries including chemicals, aluminum and paper. Russia is the main energy supplier of European countries including Germany. 40% of the EU’s natural gas and 27% of imported oil are provided by Russia, and 55% of Germany’s natural gas comes from Russia. Therefore, in order to deal with Russian gas supply Insufficient problems, Germany has announced the launch of the “emergency natural gas plan”, which will be implemented in three stages, while other European countries have also adopted countermeasures, but the effect is not yet clear.
A number of paper companies cut production and stopped production to cope with insufficient energy supply
The energy crisis is hitting European paper companies hard. For example, due to the natural gas supply crisis, on August 3, 2022, Feldmuehle, a German specialty paper producer, announced that from the fourth quarter of 2022, the main fuel will be switched from natural gas to light heating oil. In this regard, Feldmuehle said that at present, there is a serious shortage of natural gas and other energy sources and the price has risen sharply. Switching to light heating oil will ensure the continuous operation of the plant and improve competitiveness. The EUR 2.6 million investment required for the program will be funded by special shareholders. However, the plant has an annual production capacity of only 250,000 tons. If such a transformation is required for a larger paper mill, the resulting huge investment can be imagined.
In addition, Norske Skog, the Norwegian publishing and paper group, had taken severe action at the Bruck mill in Austria as early as March 2022 and temporarily closed the mill. The company also said that the new boiler, which was originally planned to start up in April, is expected to help alleviate the situation by reducing the plant’s gas consumption and improving its energy supply. “High volatility” and could lead to continued short-term shutdowns at Norske Skog’s factories.
European corrugated packaging giant Smurfit Kappa also chose to reduce production by about 30,000-50,000 tons in August 2022. The company stated in a statement: With the current high energy prices in the European continent, the company does not need to keep any inventory, and production reduction is very necessary.
Post time: Dec-12-2022