Page 47 from: January / February 2013
47January/February 2013
Paper
from mills in China as they have contin-
ued with their buying prior to the Chi-
nese New Year celebrations in February.
Domestically, OCC prices have been
maintaining a steady level. There has
also been improved demand for DLK
given reports of slow generation from
corrugated box plant producers – a
normal situation after the holiday sea-
son. Woodfree deink grades have con-
tinued to hold fi rm both in the domes-
tic and export markets, and no drastic
changes are reported for the pulp sub-
stitute grades.
Other than the possibility of further
OCC price increases for exports to
China, the overall market appears
likely to remain steady through Febru-
ary at least. However, export shipments
could be heavily impacted if dock work-
ers go through with a strike at the
major East Coast and Gulf of Mexico
ports. Their contract ended at the close
of 2012 but the dock workers’ union
and the various port authorities have
subscribed to a 30-day cooling-off
period while they continue to work
towards an agreement. This period is
Catalyst sells Snowfl ake paper mill
assets
Canada’s Catalyst Paper has accepted a binding bid from Hackman Capital
and its affi liates to purchase the assets of its closed recycled content news-
print facility in Snowfl ake, Arizona. Expectations are that the sale will be
completed in the fi rst quarter of this year.
The transaction, which is subject to US court approval, also includes Cata-
lyst’s shares in Apache Railway and was struck for a sum of more than
US$ 13.4 million plus other ‘non-monetary considerations’. The buyer intends
to continue to operate the Apache Railway as a going concern, and the
business move is supported by the town of Snowfl ake and various local
interests, says Catalyst.
‘While paper manufacturing is part of Snowfl ake’s past, this transaction puts
the asset on a path to a new future that can continue to bring value to the
region,’ observes Catalyst’s President and Chief Executive Offi cer Kevin J.
Clarke. ‘We are pleased that this transaction has progressed effi ciently and
that the community’s interests have been considered through the process
and in the successful bid.’
Catalyst Paper manufactures diverse specialty mechanical printing papers,
newsprint and pulp. Its three mills in British Columbia boast a combined
annual production capacity of roughly 1.5 million tonnes.
scheduled to end at midnight on Janu-
ary 28 but could be extended to enable
negotiations to continue.
The ports involved reportedly handle
more than 40% of the container
cargo entering and leaving the USA.
Asia
No guarantees
January has brought a big increase in
the OCC price. Whereas values kept on
dropping in December, they have now
recovered to their end-November levels
as most Chinese mills have finally
received their new import licences and
have thus been able to buy on the
international market. Prices appear to
have become more stable of late, with
demand slowing again ahead of the
Chinese New Year celebrations.
The big question for February is what
will happen when the Chinese come
back from their holidays. In previous
years, their return has had a substantial
impact on demand and prices, but a
repeat cannot necessarily be guaran-
teed in the current economic climate.
To a large extent, price increases have
been limited to OCC; all the other
lower and middle grades of recovered
fibre are showing no signs of an
improvement in the near term.
Demand from India appears to be pick-
ing up slowly. Most mills have been
trying to buy at previous levels but, as
a result of the weaker US dollar, prices
need to be improved within the coming
weeks or packers are likely to sell on
the local market.
Ocean freight rates to the Far East are
under pressure and are likely to fall by
US$ 50-75 per container, it is reported.
Meanwhile, latest fi gures reveal that
Chinese imports of recovered fibre
surged from 2.076 million tons in Octo-
ber last year to 2.57 million tons the
following month. This means the coun-
try bought in approaching 27.4 million
tons in the fi rst 11 months of last year
for an increase of 11.5% over the cor-
responding period of 2011. Its imports
of OCC and mixed papers were higher
year on year by, respectively, 12.1%
and 16.1%.
Contributing to the Recovered Paper Market Analysis:
• Melvin de Groot (Van Gelder Recycling, the Netherlands)
• Mariëlle Gommans (Bel Fibres, Belgium)
• Steve Vento (Vipa Lausanne SA, Switzerland)
RI_1-Analysis Paper.indd 47 28-01-13 16:14
