Market Update | OCC / Kaufhaus
Following a strong inflow of export orders in January, the market clearly slowed down at the start of February. January price increases were driven by a slightly stronger USD and very attractive spot sea freight rates. Once positions were filled, Indian and Southeast Asian buyers quickly withdrew from the market.
Thanks to solid export demand, modest price increases for cardboard were maintained and an oversupply in the European market was avoided. As is typical for this time of year, the sector is now entering a more challenging period. Stocks are gradually declining and the upcoming months contain a high number of public holidays, which traditionally impacts collection volumes and logistics.
OCC Prices
- Germany domestic market: 112 – 115
- Export OCC: 155 USD per ton CNF
- EUWID Germany: 117 – 120
Mixed Paper
At the beginning of January, mixed paper availability in Northern Europe was relatively ample, in line with the usual seasonal buildup at the start of the year. The increasing share of loose transport made storage more challenging. During the second half of January, inflows eased somewhat and toward the end of the month the market stabilized.
Mixed paper traded at stable to slightly lower price levels. For February, increased demand is expected, making upward price movement possible.
Mixed Paper Prices
- Germany domestic market: 98 – 110
- EUWID Germany: 110 – 116
New European regulation creates uncertainty
European regulations governing the transport and export of recovered paper and other waste streams are changing significantly. With the revised Waste Shipment Regulation, the EU aims to gain greater control over cross-border waste movements and prevent misuse. Two developments stand out: the introduction of the digital notification system DIWASS within Europe and substantially stricter conditions for exports to non-OECD countries.
Within Europe, the focus is on digitalisation and transparency. DIWASS is intended to centralise all notifications and movements within a single European digital platform. While this may improve oversight in theory, it remains unclear how existing national systems will be integrated. Many member states appear to be delaying practical implementation, while companies already need to adapt internal processes, IT systems and staffing. For high-volume, time-sensitive sectors such as recovered paper trading, there is concern that implementation issues could have immediate operational impact.
Outside Europe, the regulatory framework is tightening further. Exports to non-OECD countries will only be permitted if the receiving country can demonstrate compliance with EU processing standards and has been formally approved by the European Commission. At present, clear assessment criteria and responsibilities for enforcement remain undefined. As a result, traditional export destinations may come under pressure, potentially leading to increased availability within Europe and additional price pressure.
The key question remains whether these regulations can be implemented in a practical and workable manner within the proposed timelines. While objectives are clear, many market participants remain concerned about transitional risks and legal uncertainty.
UPM and Sappi joint venture
UPM and Sappi have announced the creation of an independent 50/50 joint venture that will combine their European graphic paper activities. Within this structure, both companies will pool production, sales and supporting functions related to graphic papers. The aim is to strengthen their competitive position in a market that has been under sustained pressure for years due to digitalisation, declining demand and persistent overcapacity.
The strategic rationale behind the joint venture is to improve efficiency and cost competitiveness by optimising capacity utilisation. This includes concentrating production volumes on the most efficient machines, reducing structural inefficiencies and improving overall operational performance across the portfolio.
Sappi contributes four European mills to the joint venture: Kirkniemi in Finland, one of Europe’s larger coated publication paper sites; Ehingen in Germany; Gratkorn in Austria; and Maastricht in the Netherlands. UPM contributes eight production sites located in Finland, Germany, the United Kingdom and the United States. These include Kymi, Rauma (including RaumaCell) and Jämsänkoski (paper line 6) in Finland; Nordland (paper lines 1 and 4), Augsburg and Schongau in Germany; UPM Caledonian Mill in Irvine, Scotland; and Blandin Mill in the United States, which, although outside Europe, is part of UPM’s Communication Papers division and therefore included in the transaction.
The combined asset base focuses primarily on graphic paper grades such as coated and lightweight coated (LWC) papers used for magazines, inserts, brochures and other print applications. There is clear overlap within the product portfolios. For example, UPM’s Caledonian Mill produces LWC grades comparable to those manufactured at Sappi’s Kirkniemi Mill. This overlap underlines the likelihood that the joint venture will actively pursue optimisation by reallocating volumes and prioritising the most efficient machines across the network.
At this stage, no formal announcements have been made regarding immediate mill closures. However, the stated objective of improving capacity utilisation suggests that, over time, less efficient machines or even entire sites could be restructured or taken offline if economic conditions require it.
Europe’s Diplomatic Weakness Exposed
The Greenland situation highlights the growing weakness of European diplomacy in dealing with the United States. Rather than taking a clear and firm position, Europe has largely responded with caution, procedural restraint and diplomatic ambiguity. This reactive approach is not only ineffective, but potentially counterproductive. By avoiding clear boundaries, Europe creates space for further pressure and escalation.
The US stance on Greenland should not be viewed as an isolated incident, but as part of a broader strategic approach in which economic, military and geopolitical interests are actively leveraged. Donald Trump, in particular, understands this dynamic well. His strategy relies on provocation, exaggeration and calculated pressure to elicit responses. Crucially, this approach is not driven by respect for compliance, but by respect for countervailing power. When faced with genuine resistance, Trump has historically shown a tendency to retreat or shift focus.
Europe, however, often responds in the opposite way. Out of fear of confrontation, positions are softened, decisions delayed and messages diluted. The hope is to ride out the storm, but in practice this stance risks intensifying it. By failing to articulate a clear European line on sovereignty, strategic autonomy and the limits of external influence, a power vacuum emerges and power vacuums rarely remain unfilled.
The issue extends beyond Greenland alone. Europe too often frames its actions from a position of vulnerability rather than strength, implicitly accepting the role of junior partner dependent on external approval. This perception is both inaccurate and self-undermining. The EU possesses significant economic leverage, political legitimacy, technological capabilities and military capacity. Yet as long as Europe behaves like a hesitant actor at the negotiating table, it will continue to be treated as such.
The paradox is that greater European assertiveness would likely lead to less conflict, not more. As in any relationship, stability and respect are built through clarity and boundaries. Relationships defined by avoidance and appeasement tend to accumulate unresolved tensions until they escalate. International politics is no different. A firm, united and confident European stance would reduce the scope for opportunistic power plays. Continued indecision, by contrast, invites them. The Greenland situation should therefore be seen as a broader warning: clarity and resolve prevent escalation, while weakness encourages it.
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