On a monthly basis, we will be providing you with news and updates in the field of paper recycling and we hope that our content will be beneficial to you and your business.
Holland and Belgium: valve of north-western Europe
Last weeks the overall conclusion was that the market for OCC would weaken due to unstable demand from Asian buyers. This week however market seem to have come to life slightly. Demand for Benelux OCC has strengthened, and price increases have been registered.
For now, it looks like the transshipments and normal export of OCC will be strong again in April. The Benelux might be the rescue valve for some other northern European markets as the surplus of material will be absorbed by them. How long will this be sustainable?
Internal demand for wastepaper in the Benelux is relatively stable. Solid board producers RdM and Solidus buy contract tonnages however are not in need of additional market orders to fulfil their appetite.
German mills taking down time
Order position of the German paper industry is overall weak, and prices remain under pressure. Liner mills face comparable issues to march where the lack of orders resulted in lower demand for wastepaper. Some liner mills revert to refreshing price counter tactics to avoid any more price drops. Some mills have announced price increases, probing the market for response.
Not only board and liner mills, but also the newsprint and magazine paper mills are taking capacity off the market. Stora, UPM and LEIPA all have announced lower demand for de-inkable wastepaper. Are they trying to stabilize the price for their product or is the anticipated decline in demand for newsprint and magazine paper taking place quicker than expected?
Weak order positions cause weak demand for wastepaper which will have different outcomes for different wastepaper qualities. With relatively strong demand for OCC from Asia, lacking German wastepaper demand will not result in lower prices. On the other hand, we will see pressure mounting for different deinking grades, due to the lack of demand from the German industry and few international supply alternatives. Expected are relatively sharp drops in prices of ONP, OMG and loose de-inkable materials.
Dropping collection, due to Easter holidays and other bank holidays in April, might lead to shortage of mixed paper and OCC in the second half of the month. Taking down time stabilizes the market on short term but doesn’t guarantee stability on the long run.
SOP still a problem child
Demand for SOP is still weak. Lacking export orders and sluggish European demand overall, SOP remains a little problem child for many. Expected price declines will follow in April, which will allow demand to be restored again. A return of demand could quickly lead to empty recycling yards.
Scanboard, CEK in German, is not very well sought after and it will probably continue to pose a problem for some recyclers. European mills, which historically pay relatively high prices for clean scanboard, have stepped down on demand last months. Comparable outlets are not easily found, as for example Indian buyers are reluctant to pay these prices. Scanboard is predicted to remain a difficult grade through the first half of this year.
Last month we saw a marginal decrease in prices of hard white, soft white and sbs. Liner mills struggle with orders and have therefore reduced purchasing of these grades.
Southern European markets rely heavily on exports
The largest exporting countries in the southern European historically rely on Asian markets. More so the last couple of months. In the beginning of the year a lot of material flowed to Turkish papermills, but after recent dramatic geological events other markets have become more important. Greece and Spain have shifted more to the far east, whereas Italy was able to sell a lot of material in the Indian market as their material is on the “favorites” list of Indian buyers…
In Italy we see the same lack of finished product orders as the rest of the world. Italian mills are famous for recycled kraftliners, mg kraftpapers and good greyboard qualities, which are especially hit by sloping consumer spending. Producers are taking downtime or produce at lower speeds.
Export markets moody
Constantly changing mood characterizes export markets momentarily. One-week deals are closed frictionlessly, the other week buyers are unavailable and not interested in new shipments. Seems like these markets also face volatile order intake and sloppy sales opportunities. Prime prices for liners are also under heavy pressure in this region.
Indian buyers closed deals for EOCC 95/5 between 145-150 USD CNF last weeks but have raised this figure towards 155-160 USD CNF. Nevertheless, it’s quite tough to find stable sales and claims are lurking. Quality issues were a hot topic on the international paper conference in Dubai last month. Paper mills struggle to keep their head above the water and are therefore very picky on the quality.
This week demand from the far east spiked due to lacking supply from the US. Low collection due to economic downturn are mentioned as probable cause. Prices for EOCC in Indonesia rebounded from last month’s decline and are now at 155-160 CNF. Low collection, and subsequent low export volumes make markets move up, but the overall state of the paper industry is not satisfactory.
China’s (re)pulp demand was very strong until the beginning of last month. Currently it seems that they can buy prime stock from other countries to fulfil their hunger. Rumors about large sales of testliner from Spain and Turkey have been in the market for some time. The lacking (re)pulp roll demand outs pressure on other markets.
Tissue mills opting for virgin fiber: bad development?
Who are we to clean our backs with virgin material. Closing the circular loop is all we want.
After corona some tissue mills have chosen to go for virgin fiber instead of recycled fiber. Yield and subsequent higher costs have been raised as the main reason for the shift…
As wastepaper traders we would always go for the recycled fiber option even if your fingers get dirty now and then. Our opinion is not completely objective of course, but we honestly feel that this is a wrong road taken. Technologically we are ever more capable of making strong, soft and circular tissue grades. Who would have thought that tissue from OCC would be the softest thing?
We vote for recycling!
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