BIR Paper World Mirror January 2014

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.

Fibre quality and generally weak freight rates were two of the main themes of 2013 for the recovered paper sector. But while the former is likely to remain a key issue throughout 2014, there is a belief that freight costs may well follow more of an upward trajectory this year.

Recovered paper shipments to China and India showed some improvement in the fourth quarter of last year, while a number of other Asian countries also upped their fibre procurement activities. At the same time, there were clear signs of export volumes out of the USA continuing to outpace those emanating from Europe.

Having started the fourth quarter at US$ 195-plus per tonne, OCC prices for Asian main ports advanced to US$ 200-plus before dropping back to US$ 185-plus at the year-end. Mixed paper followed a similar pattern, rising from US$ 165-plus per tonne to US$ 170-plus before closing out 2013 on US$ 160-plus.

According to feedback from the UK, Europe’s leading recovered paper exporter in volume terms, last year’s final quarter produced signs of recovery in the processing sector. There was fairly consistent Chinese demand for OCC, with a price drop of US$ 8-11 per tonne followed within a few weeks by a rebound. Again, mixed paper traced a similar pattern, with exporters continuing to attest that ‘a definitive improvement in the qualities available’ has been achieved on the back of stronger enforcement activities, notably in China.

Reports from France also suggest an improvement in conditions during the final quarter of 2013, characterised by an increase in recovered paper and board collection volumes, healthy demand from paper mills and generally stable prices. Stability was also noted for the paper for recycling market in Germany as collection and demand remained at quite high levels and payments were subject to no significant variations, with the exception of eroded price peaks for the deinking grades.

Meanwhile, recent demand from Poland for paper for recycling has been described as ‘remarkable’; the country’s processors have been looking to source supplies from across Germany, as well as from the Czech Republic, Hungary and Austria. Stronger orders for deinking grades from the Vipap Videm Krsko mill in Slovenia have also been reported from the Czech Republic.

As regards Spain, ‘soft’ demand for its fibre from China and good supply from neighbouring countries have combined to offset ‘the lack of local generation and therefore collections of recovered paper’. Prices for the brown grades have continued stable while deinking values fell slightly during the final quarter of last year.

Compared to market feedback for most of last year, Italy is generally offering a more positive assessment of domestic conditions. Mills’ order books are hailed as ‘reasonably good’, with enquiries for the middle and high grades ‘not expected to decrease’. However, recovered paper suppliers are continuing to voice concerns over problems in obtaining payment.

In northern Europe, graphic paper production in Finland declined around 4% when comparing the first three quarters of last year with the same period in 2012. Given that domestic mills’ demand was healthy throughout the whole of last year, some were forced to adjust production or to use, for example, pulp, other raw materials or imports in order to compensate for the shortfall in local supply. Sweden, meanwhile, has been experiencing stable conditions for several months in the recovered paper arena, with ‘a balance between supply and demand in almost all grades’. Last year saw the closure of several newsprint machines. And compared with the opening three quarters of 2012, domestic consumption of news & pams plummeted 24.2% in January-September last year to 470 000 tons while collections of the same grade slid 11.9% to 331 000 tons. However, feedback suggests that ‘the volumes are now finding new destinations’.

OCC prices increased ‘dramatically’ in Turkey towards the end of last year, pushing newspaper and overissue news prices higher. Mills ‘have been unable to source adequate quantities of newspaper and prices have duly increased’, it is reported. Despite domestic demand for the high qualities, prices ‘have not increased to expected levels and so are very close to those of the middle grades’.