By Aditya Raghunath
Investing.com -- Shares prices of paper stocks have been on an upswing this week. JK Paper Ltd (NS: JKPA ) has gained 20% in the last five trading sessions while Emami (NS: EMAM ) Paper Mills Ltd (BO: EMAP ) is up 6%. Star Paper Mills Ltd (NS: STPM ) has gained 5.61% and West Coast Paper Mills Ltd (NS: WSTC ) has closed up 5.18%. Pudumjee Paper Products Ltd (NS: PUDJ ) closed 6.56% higher in the last five days.
Two major factors are responsible for the sudden rally in these stocks: The reopening of the economy and the rising price of lumber across the world.
The reopening of the economy is an easy factor to understand. The world will start consuming more paper and associated products as business activity starts to improve but why have lumber prices suddenly started to go up around the world?
This is because of massive wildfires in parts of the US and Canada which could lead to a supply constraint in lumber. Prices of lumber in China have also moved up sharply which will give Indian players a significant advantage.
The paper industry was one of the hardest hit by the pandemic. Printing and writing almost came to a standstill as children and office-goers stayed home. While there was some relief in the form of packaging for online deliveries, it was nowhere enough to compensate for the lack of business.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.