BIR Paper World Mirror January 2013

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.

‘Intermittent’ signs of recovery in Europe and projected growth rates of 5-8% among the leading Asian economies are supporting hopes of ‘a successful year ahead’, states BIR Paper Division President Ranjit Baxi in the recycling organisation’s latest World Mirror on Recovered Paper.

With the Christmas closures in Europe, the market in December was generally ‘rather weak and volatile’, he adds. Having begun the fourth quarter at around US$ 175 per tonne, OCC values for shipments to Asian main ports went as high as US$ 195 before closing the year out at around US$ 180 or just above. ‘Quality issues’ tempered mixed paper prices, with values climbing from US$ 155-plus per tonne in the early days of the fourth quarter to US$ 175-plus before retreating to US$ 165 or slightly higher by the close of the year.

Also in the final three months of 2012, deinking prices were hit by a weak export market in Asia whereas demand for sorted office paper and other middle grades remained steady, according to Mr Baxi.

With recovered paper generation lower in late 2012 than in the same period of 2011, collectors in Germany were not in a position to build stocks as paper mills continued to place orders on a steady basis. France experienced an improvement in collection volumes in the final quarter of 2012, but the year as a whole witnessed a general decline in tonnages and was characterised by ‘fierce competition on sourcing’. An uncertain economic climate demands that close attention be paid in 2013 to ‘the financial health of customers’, it is added.

A largely warm winter has served to balance recovered paper supply and demand in Turkey. Warehouse stocks of woodfree white and news increased in the fourth quarter of 2012 but are expected to ‘melt’ in the first quarter of 2013 owing to the start-up of new production capacity.

Early indications are that recovered paper collections in the Czech Republic advanced around 4% last year to approximately 800 000 tons thanks mainly to OCC, whereas volumes of deinking grades and printers’ shavings suffered minor declines, it is believed. In contrast, recovered paper collections in Sweden fell 7.8% to 1.047 million tons in the first three quarters of last year, with OCC recording a substantial decline of 15% to 366 000 tons. Domestic recovered fibre consumption dropped almost 4% to 1.286 million tons over the same period.

While Sweden’s kraftliner mills are holding healthy order books, difficult conditions for the country’€™s newsprint sector will lead to capacity closures: Holmen Paper, for example, is aiming to close down the mill’s oldest machine (PM3) at Hallstavik during the second half of 2013 while StoraEnso Hylte is proposing to shut its PM1 machine and reduce capacity by 170 000 tons during 2013.

Across in Finland, demand for news & pams and also OCC is forecast to remain good in the first quarter of 2013 while the fibre collection total for 2012 is expected to be broadly similar to that for the previous year ‘as a result of healthy consumption of the different kinds of packaging’.

Meanwhile, changes in ownership and raw material mix are expected to reduce tissue mills’ demand for recovered fibre.

In Italy, political instability is undermining domestic mills’ ability to compete with leading European producers. High energy costs are also mentioned as a drag on the mills’ competitive position, thus echoing concerns in Spain where an energy reform implemented on January 1 this year can be expected to saddle the domestic pulp and paper industry with additional annual costs of around Euro 135 million, according to ASPAPEL. At the same time, a regulatory change which allows waste producers to demand that the waste manager gives priority to recycling within the EU is continuing to cause consternation on the basis that it limits export possibilities.

According to feedback from the UK, Europe’€™s leading recovered paper exporter, quality ‘is still top of the agenda in all markets’ and ‘€˜significant claims are arriving in the UK from most export outlets’. This situation is said to reflect ‘the proactive approach of the importation authorities, the fact that it continues to be a buyer’s market, and the inclement weather conditions prevailing in the UK throughout the summer and into the autumn’. Most UK exporters believe that, if anything, material quality has improved because of the strong focus of reprocessors on this issue.