BIR Paper World Mirror January 2015

Global – The following article is based on the latest World Mirror on Recovered Paper produced by the BIR world recycling organisation for the benefit of its members

China, the world′s runaway leader in terms of recovered paper imports, is estimated to have reduced its overseas purchases by 3 million tonnes last year from the 31.5 million tonnes bought in 2013. And with GDP growth in China expected to be lower again in 2015, fibre imports from Europe in particular are expected to suffer a further decline this year.

The strength of the US dollar in relation to the Euro helped sustain European fibre export levels in the final quarter of 2014, albeit at lower values. OCC prices started the quarter at US$ 185-plus per tonne and ended it at the US$ 168-plus level. Mixed paper values slid over the same period from US$ 160-plus to US$ 135-plus per tonne.

In general, quality rather than price has been the deciding factor in identifying fibre sources, as the following comment from France underlines: ′Ensuring a continuous supply of high-quality material has become even more crucial when dealing with the European and Asian markets. There is no room for error owing to the uncompromising quality control measures that have been implemented.′

Demand for other grades of recovered paper was maintained at relatively normal levels in the fourth quarter of last year, but with weakening prices. Deinking, sorted office paper, multigrade and other middle grades are reported to have remained in demand both within Europe and on the export market.

Feedback from Germany suggests market conditions for the higher grades have been generally balanced and stable ′even though price peaks were trimmed here and there′, particularly with multi print and woodfree shavings. In Spain, the white grades market has remained stable in recent months whereas some grades – such as SOP – have witnessed an improvement in prices ′owing to higher demand from Asia′.

Against the backdrop of ever lower graphic paper consumption, UPM is stopping two magazine paper machines in Finland this quarter in response to overcapacity on the European market; the company is also de-commissioning a line at Shotton in the UK. Decisions have been taken in the UK and Finland that will also affect the lower grades of recovered fibre.

In the case of the former, Smurfit Kappa Snodland is expected to recommence production in the first quarter of the year. And in Finland, Stora Enso is to build a new containerboard machine at Varkaus using OCC as the raw material, with start-up planned for early 2016; the announcement has ′caused tension within the market′ and ′could change the Nordic OCC market dramatically′, experts suggest.

Mills in Turkey have low recovered paper stocks owing to the winter drop-off in collection rates, with OCC values increasing by 10-15% in last year′s final quarter. The same period saw a reduction in collection volumes in Italy owing to seasonal trends and heavy rain in November and December. ′Local demand for the bulk grades absorbed the quantities that were not suitable for export because of the resulting humidity levels,′ it has been observed.

Latest statistics have revealed that imports of recovered paper into Sweden dropped 19% to 329 000 tons in last year′s January-September period while exports climbed 5% to 265 000 tons, with outgoing shipments of the news grades surging 148% to 47 000 tons whereas OCC exports declined 6% to 140 000 tons. It has been reiterated that an increase in exports to Poland and Germany from the south of Sweden ′has had only a minor effect on availability for Swedish mills because collection volumes are continuing to rise′. 

Meanwhile, recovered paper collection volumes remained static in the Czech Republic last year at around 800 000 tons – an annual total that has gone more or less unchanged since 2008. ′A very negative feature of the market has been the established drop-off in recovered paper consumption by Czech paper mills,′ it is added. ′The estimated decline of 6% was balanced by a moderate increase in exports.′

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