The last three years have seen paper pulp prices collapse by about 40 per cent because of massive overcapacity and economic recession. The industry has made several concerted attempts to lift prices, but to no avail.
This time, though, there is growing perception that the price increases could stick. Demand is rising in the US and the industry has also rationalised capacity. It is true that many manufacturers have begun to increase output in anticipation of growing demand and better margins, but with the fundamentals pointing in the right direction, shares in Arjo Wiggins, yielding around 3 per cent, should firm up further after a 12p rise to 296p yesterday.Reuse content