The company says current overcapacity in European coated papers market is 1.2 million tonnes. Demand has matured and the post recession rebound in demand is over, according to RISI’s new European Coated Papers Risk of Closure Study, with overcapacity of coated woodfree and mechanical papers lowering prices and affecting producer profitability.  

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," says director of European graphic papers Sampo Timonen, author of the study.

Timonen analysed 90 paper machines and 20 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 study analyses machine risk of closure by company, indicating machines likely to face proactive closure, potential divestments and closures due to bankruptcy.

More information at http://utrk.net/1c47z/?16YOA005ME9