Paper mills close as demand declines

Two of the world’s biggest paper producers are closing mills, taking out 2 million tonnes of publication paper capacity between them, citing declining demand.

 Gone: Two million tonnes of paper

UPM is closing its mill in Kaipola, Finland and selling off a newsprint mill in the UK – on condition it is converted to something else – while SCA is exiting publication papers altogether, converting its last remaining graphic papers mill, which is in Sweden, to produce chemically pre-treated thermo-mechanical pulp, which will be used in packaging board and hygiene products.

With around 70 million tonnes of graphic papers still manufactured each year, the closure of the mills in Sweden by SCA and Finland by UPM will not affect supply, with global capacity still sitting ahead of current demand. However, the removal of almost 2 million tonnes of paper in a single day is unprecedented and indicative of a changing market.

The closure of the UK newsprint mill, located at Shotton, comes just a month after UPM closed its French newsprint mill. The two closures have taken out 690,000 tonnes of newsprint a year.

SCA said Covid had forced its exit from publication papers, saying that while the market had been in single figure decline every year since the GFC, demand had plummeted by 30-40 per cent during Covid. UPM said that while demand was down, paper making remained a large and sustainable business that it is fully committed to.