Strange coated mechanical pricing switches to medium weights

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Global paper markets are in turbulent times, especially when it comes to pricing. Nowhere is that more evident than for Coated Mechanical grades, with the latest import shocks being delivered by Medium Weight Coated (MWC) grades, the average prices of which rocketed to record levels in April, for some grades.

In the previous edition of Pulp & Paper Edge, we reported the apparent average import price of Light Weight Coated (LWC) mechanical printing papers had plunged in March 2022. We can report those crunching low prices were not revised for March, but prices exploded for April, to levels not seen since early 2009.

Clearly, there is something going on in the coated mechanical paper market that has seen sharp price increases interspersed with peculiarly low prices. The price increases make good sense. Supply from Europe is a long and very costly sea freight journey, European producers have applied energy cost levies thanks to Russia’s aggression in Ukraine and all pulp prices are high right now. The dramatic low price for LWCs in March remains difficult to understand.

An initial examination of the LWC prices compared with the two major grades of MWCs shows how dramatic the price variations have been in the last few months. The table provides the details for the last three months of imports.


Selected Coated Mechanical Import Prices: Jan ’20 – Apr ’22 (AUDFob/t)

Source: ABS, derived and IndustryEdge


The downwards price movements for LWC grades in March are as dramatic as those upwards for MWC grades in April. The difficulty is the latter are understandable, the former are not. Rather than dwelling on what appears to be an uncorrected error with the LWC import prices, we will turn attention onto the MWC grades.


MWC Import Volumes Up 6.4% Year-ended April

There are four grades of Medium Weight Coated mechanical paper imports. They are split between Reels and Sheets and further split on the proportion of Mechanical Pulp from which they are manufactured.

In total, year-ended April 2022, imports were up 6.4% to 95.1 kt, as the chart and table show.


MWC Imports by Grade: Jan ’20 – Apr ’22 (tpm)

Source: ABS, derived and IndustryEdge



YE Apr ’21

YE Apr ’22

% Change

MWC Reels < 55% Mech. Pulp




MWC Sheets < 55% Mech. Pulp




MWC Reels > 55% Mech. Pulp




MWC Sheets > 55% Mech. Pulp









Notably, the MWC grades containing less mechanical pulp experienced growth, while those using a greater proportion declined over the year.

In aggregate, MWC imports are dominated by three countries, from three distinct regions: Finland, Korea and USA. The chart and table here show the details and demonstrate among the majors, Korea was alone in losing volume over the year-ended April 2022.


MWC Imports by Country: Jan ’20 – Apr ’22 (tpm)

Source: ABS, derived and IndustryEdge


Import Prices Rocket to Records

Australia’s MWC imports are holding up well in the context of what are rocketing price increases. In April 2022, the average import price lifted to AUDFob1,346/t, a 30.9% lift on the prior month and a 34.0% rise compared to April 2021. The main driver for price rises experienced by buyers was – until April – freight cost increases. Freight costs rose 63.7% from April 2021 to April 2022, when they amounted to AUD252/t, as the chart here shows.


MWC Import Prices and Freight Cost: Jan ’20 – Apr ’22 (AUDFob/t, AUDCif/t & AUD/t)

Source: ABS, derived and IndustryEdge


A quick look at the freight costs per tonne shows the only MWC grade operating outside the average freight cost increase is MWC Sheets <55% Mechanical Pulp. The majority of this grade is imported from Netherlands and Germany and a cursory examination shows the main port of loading is Antwerp. Given the general cost of shipping and freight out of Europe has expanded significantly, the importers have done particularly well to keep those costs in check!

Subscribers can download the monthly data and conduct these and other analyses for themselves.

This chart shows the freight cost per tonne for the four MWC grades, with the weighted average displayed on the grey columns.


MWC Freight Costs per Grade: Jan ’20 – Apr ’22 (AUD/t)

Source: ABS, derived and IndustryEdge

Over the last fifteen years, printing and communication paper markets have become hyper-sensitive to prices. For the most part, that has been driven by falling demand and excess supply chasing markets. A buyer cohort that became used to paying less and less is learning if they want supply, they must pay more and ensure they pay sufficiently for their volumes to make it to the far ends of the earth.

In that context, these steeply rising MWC prices will be of interest. If import volumes are sustained at these prices – and these prices appear baked into the global economy for the remainder of 2022 at least – perhaps we will be saying the market dynamics have finally changed. That would be a good development for the long term future of the entire industry and supply chain.


This item was first published in Edition 204 of Pulp & Paper Edge in June 2022

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