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Stats Spotlight: Navigating Shifting Price Trends
1.02 Mixed Paper – DAP German Mills
In the European market, Mixed Paper prices have also faced consistent downward pressure.
Contract Prices: Initially higher and relatively stable through mid-2024, they began to follow a gradual decline as market conditions softened.
Spot Prices: These have consistently been lower and are dropping at a faster pace, reflecting weaker demand and increased supply in the short-term market.
Factors influencing these declines include overcapacity in recycling plants and uncertainty in energy markets, which affect operational costs for mills. With a further dip expected in December, the paper sector faces ongoing challenges to maintain profitability.
Kaufhaus/OCC
OCC 95/5 Exports to India
The export market for OCC 95/5 has experienced a steady decline since July 2024. Prices began near $200 per ton but have shown consistent month-on-month drops, with projections indicating further decreases in December. This downward trend can be attributed to a combination of factors, including:
Reduced demand from Indian mills, driven by lower production levels and a shift toward domestic sourcing.
Shipping challenges and fluctuating freight costs, which have placed additional pressure on the profitability of exports.
Exporters need to stay agile, balancing competitive pricing with operational costs. This trend emphasizes the importance of long-term strategies, such as exploring alternative markets or optimizing logistics for better margins.
What to Watch For in 2025:
We predict that shifts in European recycling policies and potential cost reductions in energy prices could stabilize the situation by mid-2025. However, the focus should remain on mitigating short-term risks.
Currency Update: EUR to USD Exchange Rate and Its Impact
1 EUR = 1.05 USD
Last updated: December 1, 2024
The euro-to-dollar exchange rate has hovered around this level in recent weeks, reflecting a relatively stable international currency market. For paper exporters, this rate has two primary implications:
Cost Advantage for European Exporters:
A weaker euro compared to the dollar makes European paper products more competitive in international markets like the U.S. and Asia. Exporters can use this to their advantage when negotiating contracts or expanding their market presence.
Import Costs for U.S.-Sourced Materials:
Companies importing materials from the U.S. may face slightly higher costs due to the exchange rate. Consider strategies to hedge against currency fluctuations, such as forward contracts or diversifying suppliers.
Spotlight News: The Stories Shaping December
Numerous Downtimes in the Paper Industry
December is shaping up to be a turbulent month for recycled paper suppliers. Several factors are converging to create disruptions:
Planned Factory Downtimes: Many mills have announced closures for maintenance, reducing the availability of recycled materials.
Potential Sector Strikes: A looming strike in the paper sector threatens to exacerbate supply chain delays. Should the strike proceed, it could significantly impact production capacity across key markets.
What This Means for You:
To minimize disruptions, ensure that deliveries are completed before December 20th. Communicate proactively with suppliers and customers about potential delays, and consider stockpiling critical materials to navigate this period smoothly.
IMTrade Travels Across Europe
As part of our commitment to fostering strong partnerships, the IMTrade team has been visiting key regions in Europe, from Scandinavia to the Baltic States. This trip has provided valuable insights into regional market dynamics and potential opportunities.
Highlights include:
- Discussions with Scandinavian partners about sustainable innovations in the recycling process.
- Visits to Baltic suppliers focusing on high-quality, low-cost material solutions.
Why It Matters:
These collaborations not only strengthen our supply chain but also ensure that we remain at the forefront of industry trends. Stay tuned for updates on how these partnerships will benefit your business.
EUWID Contract Mark-Ups Expected to Decline in 2025
The pricing structure for EUWID contracts is set to undergo significant changes in the coming year. Mark-ups, which ranged between €60-70 per ton in 2024, are expected to drop sharply due to:
Buyer Pressure: Customers are demanding lower premiums, given the softened market conditions.
Secured Contracts: Many mills have locked in reduced pricing for 2025, further driving the downward trend.
Industry Implications:
This could lead to a more competitive market environment, with mills and suppliers needing to optimize operations to maintain margins. For buyers, this presents an opportunity to renegotiate terms or explore new suppliers.
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