BIR Paper World Mirror November 2012

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

OCC and mixed paper suffered significant price declines during the third quarter but recovered lost ground before the end of the three-month period. Having dropped from US$ 195 to US$ 170-plus per tonne on an ex-works basis, OCC values returned to US$ 190-plus in September; mixed papers suffered an even steeper drop from US$ 170-plus to US$ 135-plus per tonne but subsequently climbed back to US$ 150-plus.

For India, ‘€˜slow’€™ demand has been reported of late for the middle and higher grades of recovered paper, thanks in no small part to the depreciation in the value of the rupee versus supplier currencies. However, it is reported from the UK that the requirements of white-top production in China and India, as well as strong European demand, have resulted in ‘€˜robust’€™ order levels for SOW at prices equal to or higher than those of multigrade. As regards newspapers & magazines, demand has been steady from a number of Asian countries.

Sea freight rates and surcharges added to Europe-Asia movements in July, August and September amounted to an increase of between US$ 200 and US$ 250 per 40-foot container. However, freight rates appeared to have stabilised by the middle of September, raising hopes of a more settled final quarter.

‘€˜Quiet’€™ recovered paper collection activity in France has led to a drop-off in volumes estimated at 10-15% this year. For the brown grades, spot prices emerged on the domestic market as paper mills tried to restore normal stock levels, resulting in a Euro 10-15 per ton price increase in September. While the country’€™s collections of the deinking grades have not been plentiful, they have been sufficient to match demand.

Fibre collection volumes in Sweden fell 14% in the first half of the year while many collectors’€™ depots in Germany were described as being ‘€˜devoid of stock’€™ amid mounting concern within the recovered paper sector regarding the trend towards mills buying fibre directly at collection points. And the following comment sums up market conditions from the UK perspective: ‘€˜Recessionary factors resulting in poor generation and poor demand in some market sectors have led to challenging times for UK merchants and brokers alike, with less and less tonnage being chased by more and more operators, leading to fierce competition and squeezed margins.’€™ 

In contrast, fibre collections actually improved in the Czech Republic over the course of the first three quarters of this year – by 3% when compared to January-September 2011.

In Northern Europe, there are indications that the tissue industry in Finland has begun using cheap pulp instead of the woodfree grades. And across in Sweden, kraftliner mills have healthy order books and are expected to operate at full capacity in the coming months. At the opposite end of the continent, it is reported from Italy that ‘€˜some mills across different sectors have stopped production’€™. The country’€™s banks have persisted with their focus on the credit-worthiness of businesses at a time when paper mills are continuing to suffer the impact of the economic crisis.

According to feedback from Turkey, prices of all qualities of recovered fibre fell around 10-15% in the third quarter, with finished product prices heading in the same direction owing to a drop-off in demand from both the domestic and export markets. While the start-up of new capacity at Kutahya has been postponed until the New Year in light of technical problems, a number of projects are now in the pipeline that will substantially increase the country’€™s paper and board production capacity over the next three years or so.