OCC prices recover on renewed Chinese interest

Asia – Having nosedived around the start of the second quarter, prices paid by Chinese mills for European supplies of OCC have rebounded strongly – a sure sign, say recovered paper industry experts, of ‘a shortage of fibre’.

In the opening quarter of 2017, Europe’s leading recovered fibre exporter – the UK – saw its OCC export prices to China peak at upwards of £150 per tonne (approaching Euro 180) before plummeting to around £75 (Euro 90) by early April.

However, Chinese buyers have made a swift return to the market to replenish supplies amid reports of more stable demand for their containerboard, thereby catapulting export values for UK-origin OCC to nearer £120 per tonne (Euro 144).

Mixed paper values have also improved, albeit not in proportion to the OCC gains. According to one recycling industry expert, mills in Europe are generally busy and so took advantage of the period of lower prices to stock up on ‘cheap tonnes’.

The reduction in trading activity following the Chinese mills’ decision to drop prices has prompted an adjustment in previously soaring freight rates.

Some exporters are still paying US$ 2000 per 40-foot container but others are reporting that shipping lines are ‘reluctantly’ offering significant discounts to around US$ 1600.