"On a more positive note, increased demand has strengthened our position in the markets," said president and chief executive Jussi Pesonen, who added there was a good possibility prices would rise.

Deliveries for the first three months were 2.6m tonnes, with magazine papers increasing by 8% and newsprint up by 13%.

Sales grew by 1% to 1.6bn. Pre-tax profit for the first quarter was 42m, a fall of 42% on last year. UPM announced a 40m (e60m) investment in the production of release base paper at its Tervasaari mill in Finland and said the market was forecast to grow by 4-8% per year.