BIR Paper Report July 2009

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

Even though conditions in the recovered paper market remain challenging, European export volumes have maintained their steady growth and prices have firmed. The second quarter brought stronger demand from the leading market of [b]China[/b] as well as from other Asian countries, and prices paid for Europe’s OCC have jumped from US$ 110 to around US$ 130 per tonne, while good-quality mixed paper is now attracting nearer US$ 120 as against US$ 100 per tonne.
Over recent months, those exporting recovered paper between Europe and Asia have faced regular increases in freight rates amounting to around US$ 400 per 40-foot container for the year to date. In part, these hikes have reflected the reduction in vessel space implemented by many shipping lines in reaction to the global economic downturn.
BIR | The following article is based on the latest Paper World Mirror produced by the BIR world recycling body for the benefit of its members.

Even though conditions in the recovered paper market remain challenging, European export volumes have maintained their steady growth and prices have firmed. The second quarter brought stronger demand from the leading market of China as well as from other Asian countries, and prices paid for Europe’s OCC have jumped from US$ 110 to around US$ 130 per tonne, while good-quality mixed paper is now attracting nearer US$ 120 as against US$ 100 per tonne.
Over recent months, those exporting recovered paper between Europe and Asia have faced regular increases in freight rates amounting to around US$ 400 per 40-foot container for the year to date. In part, these hikes have reflected the reduction in vessel space implemented by many shipping lines in reaction to the global economic downturn.
Exporters have also encountered moves to impose stricter quality standards in both Indonesia and India. Initially, the Indonesian government had planned to introduce 100% inspection controls for all shipments arriving at the country’s ports after June 24 this year; however, implementation has now been deferred until September 24. At the same time, the government has said it is willing to extend the number of approved surveyors beyond the original two.
The Indian government has agreed – subject to further advice from its Directorate General of Foreign Trade (DGFT) – not to enforce a proposal requiring imports of recovered fibre to be accompanied by a chemical certificate. Nevertheless, certification queries have led to severe congestion at Indian ports, prompting many shipping lines to cut availability of space on India-bound vessels.
During the second quarter, India’s demand for recovered fibre remained at similar levels to those recorded in the first three months of 2009.
Within Europe, mill demand for recovered paper – as well as arisings of secondary fibre – have been adversely affected by a sharp reduction in finished paper product sales. Merchants’ yards are largely bereft of stock: collections in the UK are running 9% behind those of 2008, with tonnages emerging from the industrial and commercial sectors slumping 25-30%; and in Germany, arisings from municipalities have followed those from industrial and commercial sources in registering a substantial decline. In the Baltic Countries, volumes of recovered paper emerging from packaging and industry sources remained low during the second quarter of 2009 while tonnages collected from households continued at relatively normal levels.
In France, recovered paper collection volumes dropped around 15% in the final two weeks of the second quarter, giving rise to suggestions that sourcing of supplies will prove exceedingly difficult during the summer months.
Production capacity closures in the Czech Republic have resulted in a 35% slump in domestic consumption of recovered fibre and a subsequent 44% jump in overseas sales as tonnage was re-routed into the export market. Recovered paper collection volumes have fallen 15% and are expected to decline 20% between now and the end of the year. Czech paper mill production has dropped 26% while consumption of paper products has fallen 23%.
Mills in other countries have taken drastic action to accommodate lower demand for their products. In Finland, producers have announced stand-stills of around 12 weeks over the summer months while some mills in France implemented closure periods ahead of July and August.
In Turkey, a number of paper mills returned to production at the start of the second quarter but still did not operate to full capacity. Looking ahead, a small increase is foreseen in OCC and news prices while high grade prices are expected to remain unchanged.
On a positive note, the imminent start-up of the new Palm newsprint mill in the UK has contributed to domestic prices for newspapers & magazines exceeding export levels, with the result that exports of this grade have reduced significantly. And in Sweden, newsprint mills are expected to produce at full capacity during the third quarter because of their currency advantage over Euro-based countries. However, a dramatic decline in Swedish collections of tissue grades is anticipated over the same period.
And on an historic note, latest statistics reveal that Spain exported 227 268 tonnes of recovered paper and imported 209 092 tonnes in the first quarter of this year – making the country a net exporter for the first time ever.