Unveiling Insights: Dynamics and Transformations in the Global Paper Industry 

Sunshine and Surprises: Record Heat, Paper Mill Closure, and Market Outlook in the Benelux Region


The Benelux region was gripped by delightful warm weather. A record of 37 consecutive rainless days was recorded in the Netherlands. BBQs and social gatherings were abundant throughout the month of June. Life is good!

Regarding recovered paper, there was little activity. Both supply and demand were modest. Export took a step back in June, resulting in a portion of the bulk tons (cardboard and kraft II) being exported to neighboring European countries. Fortunately, the buyers, mainly from Germany, were still willing to purchase the material (at a lower price, though) after a period of no imports from the Benelux. Schoellershammer, Niederauer, and other bordering factories were slightly more active in the Benelux this month, either directly or through trade.

A stable market was expected for June. It seems that exports have reached a bottom, and factories in and around the Benelux will not be able to purchase at lower prices than they currently do. Most collectors have sold at prices around 100-110 euros FAS. This material was being shipped to Indonesia, Vietnam, and Thailand. Supply is low, and with the start of vacations in July, a further decline may occur, but we still hope to see an improved market in mid-July.

The news of Stora Enso de Hoop closing its doors came as a surprise, despite everyone’s intuition. Stora has recently finalized a deal with De Jong Packaging, which included the acquisition of the Eerbeek factory. We can’t imagine that this step was not already part of the deal, or Stora has reached an agreement with the local government in Gelderland to remove a polluter (nitrogen, CO2) from the market. For us, as paper mill enthusiasts, it is sad and especially bad news. A good factory (founded in 1657), although with its limitations, in a beautiful village in eastern Netherlands will be closed. The planned closure is part of a larger restructuring effort by Stora Enso, which also includes the closure of facilities in Finland, Poland, and Estonia. In total, 1150 jobs will be lost.


Germany: Challenges and Shifts in the Paper Industry: Demand Struggles and Factory Events Unrecovered 

The game has begun anew. Paper mills processing recovered paper are putting pressure on suppliers. They would like to see the prices of recovered paper drop even further.

At the end of May, we saw a slight increase in the price of cardboard, but it became clear in the first week of June that further increases were not on the horizon. Other notabele events were:


Shutdowns in the German recovered paper industry remain a common occurrence. As you read numerous factories were idle last month due to “repairs” and “maintenance,” and this pattern is expected to continue in the coming months. Companies such as Smurfit and Hamburger have already announced downtime.

We see that the paper industry, especially liner producers, are facing difficulties. Demand for testliner is meager and selling excess volume or “b- and c-grade” cardboard is challenging. This means that machines are not running at optimal capacity, resulting in inconsistent off-take. Furthermore, it is difficult to plan input effectively as order books are not well-filled. Currently, more ad hoc or just-in-time deals are being made, making planning more challenging for many companies on the market.

The robust German paper market has been grappling with demand issues for months, and global competition has intensified due to overcapacity. While the German industry used to ship a significant amount to the USA, Canada, and Central and South America in recent years, we see that has greatly declined this year.


Rest of Europe:  

Market Challenges and Declining Prices: The State of Paper Industry in rest of Europe 

French factories increased prices for cardboard and mixed paper by 20 Euros from April to May. However, in June, this increase was largely reversed. Overall, in June, cardboard was paid 15 Euros per ton less than in May. The French price adjustment also had an impact on the German market. Since German buyers had already made some commitments, they couldn’t fully take advantage of the French price drop.

In Italy, the situation doesn’t seem much different from other European countries. Factories are struggling with a poor order portfolio and facing challenges with the costs of other raw materials such as starch and chemicals. Italian factories are relatively smaller compared to other factories in Europe and often produce different qualities.

Eastern Europe seems relatively stable. For example, Poland, Mondi and Stora have received enough material and do not need to import additional material.

Furthermore, we have seen collectors around the Mediterranean are shipping their material to Asia. The economic downturn is evident in the freight rates for sea containers. Negative freight prices (additional payments) have already been reported towards Asia.


Higher Grades 

The decline continues! The paper recycling industry is suffering from rapidly decreasing pulp prices. Uncoated woodfree white 3.16 and uncoated woodfree white 3.18 were traded 25-30 euros per ton lower from May to June. It is expected that the prices for higher grades will decrease by another 20 euros per ton. It is challenging for collectors and traders to sell the higher grades, and often reappraisal is necessary. Which further complicates the market.

Scanboard (CEK) and SOP remain challenging topics. Multidruck has now joined the list. Due to the difficult market conditions in the cardboard industry, these grades, which are often used for middle layers, are very difficult to sell. Scanboard is currently traded within Europe at 160-180 euros per ton to the factory. Higher prices can still be found, but the market demand in this price range is very challenging. People do not want to hold on to excess inventory, so there is also a lot of dumping in the market. Contractual quantities become an even bigger problem because the price is often indexed.

SOP is traded between 170-210 Euros per ton, depending on the quality. Even at relatively low volumes, this type is difficult to sell. The return of Mayr Melnhof FS Karton Neuss may bring some relief. Export markets, which previously absorbed a portion of the quantities in the first part of the year, have now created a total vacuum. For example, Kypas in Turkey is hardly buying any quantities, and there are only few European suppliers willing to venture into the Indian market.

Recovery in the market for better grades can only be expected when pulp prices stop declining, and other markets stabilize. For July, we anticipate a further decrease of 10-15 Euros for Scanboard and SOP, and an even stronger decline of 15-25 Euros per ton for printers waste and multidruck.


Asia: Challenges and Opportunities in the International Paper Markets  

In the current state of international markets, a sense of calm prevails. Thai, Vietnamese, and Indonesian customers are making cautious purchases, while Indian buyers are still actively seeking weaknesses among European and American suppliers.

Over the past few weeks, we have noticed a slight increase in activity from Indian factories. The price level for European cardboard has been fluctuating between $125-135 USD/mt for weeks. This uptick in activity could indicate improved willingness or the necessity to make purchases. Only time will tell what the coming weeks will bring.

There also has been significant dissatisfaction in Europe regarding the number of claims initiated by Vietnamese buyers in recent months. While we experienced a relatively damp spring, excessive claiming is more of a rule than an exception. Paper has the characteristic of easily absorbing moisture, so when a container is transported through relatively warm zones for 4-5 weeks, the moisture often accumulates on the outside of the bale. Proper calibration of moisture measurement equipment is crucial for accurate readings. Unfortunately, this aspect is often lacking among our customers in the Far East. We acknowledge that we are not perfect either, but there is still room for improvement on both sides.


Specialty Grades 

India is a market known for its variety of paper grades, and many types find their way to the country with its 1.4 billion inhabitants. In April, the prices for SOP and Multigrade, for example, were around $300-320 and $320-340 respectively. However, both grades have now fallen below $200 CNF. The pressure on sales is immense when India’s demand slows down, and this is evident in the significant price reductions for these grades.

The demand for other specialty grades in Asia is limited. Indonesia occasionally purchases higher uncoated grades as a pulp substitute, but they can now obtain relatively cheap dumped pulp from South America, for instance.



Let’s top off this article with (hopefully) some celebrations in the sun once again. Rick will be celebrating his birthday on the 24th of July, followed by Daan and Joyce on the 30th. Maybe we see opportunities for a delightfull barbecue.

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