The stalemate in Finland is continuing following the Finnish Paperworkers Union's rejection of the National Conciliator's proposed settlement on 5 June.

McNaughton Publishing Papers managing director Simon Varley said the situation was starting to bite, and could get worse, with supercalendered (SC) rotogravure grades one of the hardest hit.

"My view is do not expect any replenishment of stocks in the UK until the end of July," he warned.

Alternative stocks had already been sourced, and Varley said he was aware that Finnish manufacturers were switching production to mills outside of Finland.

One printer dealing with the impact of the situation is Pensord Press, which has been forced to source grades from outside Finland.

Chief executive Tony Jones said: "From our point of view that's fine as it's a grade we have used before. But to our merchant it could mean a significant loss of business of around 1m."

BBC Worldwide paper manager Steve Wehrle said: "I don't think it's started to bite yet, but you cannot take half a million tonnes of production out without it starting to take effect."

Finnish mills have extended their lockout of the workers by a further two weeks until 29 June, and will continue unless a deal is reached prior to this date.

Credit Suisse First Boston pulp and paper industry analyst Lars Kjellberg said he was surprised that the unions had turned down the latest deal, and felt the paper industry had no further to move.
Kjellberg said it was unlikely M-real, UPM or Stora Enso would take the lead in any price rises, preferring to leave it to other manufacturers to make the first move.

Story by Andy Scott