IMpress Oktober 2023

Noisy Paper Times: Rising Prices and Factory Shutdowns Announced

Europe – Other Grades: The European paper market is in motion

Cardboard prices are on the rise, while paper factories are announcing shutdowns. These times appear to be quite exciting, with all the market turbulence and unexpected movements, but we remain optimistic! Cardboard prices have been steadily increasing in recent weeks, with cardboard prices now approaching 110-115 euros DAP in western Germany. This is partly due to the growing demand for kraft paper types from Asia, as is often the case.

The trend of Chinese companies purchasing cardboard from Europe to support their own production continues to persist. According to Bloomberg, in the first half of 2023, China imported more than 50 million tons of cardboard from Europe, marking a 20% increase compared to the same period last year. This increase naturally has consequences for the Benelux region. Dutch and Belgian cardboard factories are taking advantage of the high prices by exporting their products to Asia, while West German factories are responding with price hikes. The dynamics of this game continue to evolve! Ultimately, this has led to reduced cardboard availability in the Benelux, which could further drive up prices. Currently, handling prices in the Benelux stand at 110-115 euros/ton delivered. In any case, this situation is already causing some concern in Germany regarding what will happen next month. Our eastern neighbors cannot afford for mixed papers and cardboard prices to skyrocket completely. Fortunately for them, the deinking market is showing some improvement in the Benelux, which might alleviate some of the challenges.

In addition to all the ‘good’ news mentioned above, there have also been announcements of shutdowns at paper factories. For example, Irish Smurfit Kappa (which is merging with its American counterpart WestRock) will be closed for a week in the Netherlands and Belgium in October, and Stora Enso de Hoop will also be closed for two weeks in the Netherlands in October. These shutdowns could further push up paper and cardboard prices, but they could also bring stability. We’ll have to wait and see.

The paper industry in Europe is undergoing significant changes. The overall demand for paper and cardboard has decreased in recent years, partly due to the rise of digital media. This trend is also evident in the discontinuation of sending unaddressed advertising leaflets by the retailer E. Leclerc. Among other trends, this has led to the closure of some factories, such as UPM in Maastricht and Stora Enso in Veen.


Higher Grades still facing challenges

Overall, the higher grades are still facing challenges, making it a difficult market. Multidruck seems to have experienced a slight increase in trade, and CEK is still being ordered gradually, with the possibility of it being traded more frequently between September and October. We can conclude that there is a sharp decrease in the trading volume of higher grades, and it may be time for an update of the grade-list EN643. We can also observe that regulations on CO2 emissions are spreading everywhere and are becoming a global network of challenges.

We have already seen factories being shut down due to the effects of regulations, and it is also impacting the construction sector, resulting in many purchase contracts going uncovered and leading to contract adjustments. Recyclers are currently dealing with excess stock.

Despite the challenges posed by CO2 emission regulations, many companies are making the best of it. For instance, the Prinzhorn Group has announced significant investments (300 million euros) in Western Europe for Hamburger Containerboard, Hamburger Recycling, and Dunapack Packaging. These investments reflect the company’s long-term strategy of “growing value” and maximizing its impact on business, the environment, and society (Source: Prinzhorn Group).


Asia – Other Grades

Asia’s paper trade surges: demand, expansion, and global impact

The paper trading industry in Asia grew by 2.5% in September compared to the same month last year. This growth is attributed to increased demand for paper used in packaging, graphic applications, and hygiene products (Source: IPPO).

The growth was particularly pronounced in Asia, where there has been a significant increase in demand for paper for packaging. This is driven by the expanding e-commerce sector and increased exports of Chinese products (Source: Bloomberg). Japan and South Korea also experienced growth in the paper trading industry. In Japan, the growth was mainly seen in the graphic sector, while in South Korea, the growth was primarily in the hygiene sector.

Additionally, we have noticed a rising demand from our Indian counterparts for kraft paper such as OCC and KCB for Europe, due to a shortage of materials being delivered from the USA.

There are rumors that bulk shipments are arriving from various ports surrounding the Mediterranean Sea at highly competitive prices, around 200 USD. It is expected that the growth in the paper trading industry in Asia will continue in the coming months due to sustained demand for paper used in packaging, graphic applications, and hygiene products. Hopefully, Europe will continue to be a significant player in this market (Source: Reuters).”

Other news

The 20th of October Alwin will celebrate his birthday.




Joost staat voor je klaar. Je kunt contact opnemen via of via
  +31 6 53470798

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