BIR Paper World Mirror June

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

Rampant increases in the bunker adjustment factor (BAF) have brought more misery for those companies looking to export recovered paper to Asia. Fluctuating currency adjustment factor (CAF) levels and a volatile US dollar have also complicated the sales and pricing picture.
Early signs of recession in Europe have led to a decrease in imports from Asia and, in turn, to a slight reduction in container availability at some European ports. At the same time, all eyes are turned to China to see what levels of demand for recovered fibre will emerge after the Olympic Games in Beijing. The Asian giant imported 5.918 million tonnes of recovered fibre in the first quarter of 2008; if this purchasing pattern were to be replicated throughout the rest of the year, the country’s imports would grow 6.4% to around 24 million tonnes compared to 22.56 million tonnes in 2007.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.

Rampant increases in the bunker adjustment factor (BAF) have brought more misery for those companies looking to export recovered paper to Asia. Fluctuating currency adjustment factor (CAF) levels and a volatile US dollar have also complicated the sales and pricing picture.
Early signs of recession in Europe have led to a decrease in imports from Asia and, in turn, to a slight reduction in container availability at some European ports. At the same time, all eyes are turned to China to see what levels of demand for recovered fibre will emerge after the Olympic Games in Beijing. The Asian giant imported 5.918 million tonnes of recovered fibre in the first quarter of 2008; if this purchasing pattern were to be replicated throughout the rest of the year, the country’s imports would grow 6.4% to around 24 million tonnes compared to 22.56 million tonnes in 2007.
The second quarter brought signs of price weakness in Europe, the USA and Japan, notably for OCC and mixed papers. In Germany, for example, prices paid for some of the lower grades of recovered paper fell as much as Euro 30 per tonne in a two-month period. In Sweden, however, demand mainly from the smaller paper mills and higher exports to both Germany and the Far East have put pressure on the domestic OCC price. Also in recent months, Mondi Poland has tried to buy OCC in southern Sweden ahead of the start-up of its new machine scheduled for mid-2009.
Across many parts of Europe, the middle grades have enjoyed reasonably steady demand and prices, whereas deinking material has actually recorded price increases. In the Baltic Countries, for instance, prices for news & pams and woodfree deinking grades have climbed around 5%.
There was a recurring theme among the reports from individual European countries, namely loss of production capacity through downtime and closures. From Spain, it has been reported that Smurfit Kappa has definitively closed its Valladolid mill which used to consume about 130 000 tonnes per year of recovered fibre. In addition, Papelera del Centro has closed for a month while Europack has taken around 50 days of downtime for the rebuilding of one of its machines. Some mills were forced to stop production because of a nine-day lorry driver strike while producers elsewhere have taken – or are planning to implement – brief stoppages for maintenance purposes.
In the Czech Republic, the closure of the Norske Skog paper mill at Steti, a consumer of around 80 000 tonnes of deinking grades each year, is expected to produce changes in the market, although the same country reported a 27% increase in its recovered paper exports during the first quarter of this year.
In an otherwise balanced market in Finland, there are fears that Russia’s plan to increase customs duties on its round wood exports will considerably increase paper and board producers’ raw material costs and could lead to some machines being shut down. Figures reveal a 20 000-tonne increase in the country’s recovered paper collections last year to 845 000 tonnes but a dip in the collection rate from 68% to 66.3%.
Even in the UK where SAICA has announced the construction of a new mill for 2010, the news has been tempered by confirmation that the SCA mill in south-east England will be closed down simultaneously. Already Europe’s leading recovered paper exporter, the country’s overseas shipments accelerated once again in April after a downward dip in March and remained very buoyant throughout May, June and into July.
In Sweden, meanwhile, the Holmen group is closing the PM2 machine and deink line at its mill at Hallstavik with effect from November this year. The line has been using approximately 120 000 tonnes of news & pams per year – tonnage which will be switched to Holmen mills in Braviken and Madrid. The Hallstavik mill is to produce newsprint and improved newsprint using only virgin fibre.
There is mixed news from Turkey: Modern Karton activated its 400 000 tonnes-per-annum PM4 machine during the second quarter of 2008; but many of the country’s small and medium-size mills are expected to stop production over the coming months because of increases in their fixed costs. Meanwhile, it is reported that Turkey has begun exporting certain grades of recovered paper to the Far East.
There is a severe crisis in the packaging production sector owing to a drop in consumption, according to feedback from Italy. Mill inventories are equivalent to around 30 days’ supply whereas stocks among recovered paper dealers are higher than for some months.