BIR Paper World Mirror June 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.

OCC export prices for Asian main ports started the second quarter at US$ 175-plus per tonne and progressed to US$ 180-plus whereas mixed paper values stagnated around the US$ 160-plus mark as a result of weak demand owing to ‘quality challenges’. The middle grades were generally steady over the same period, both in terms of demand and prices.

Also in the second quarter, sea freight rates between Europe and Asia increased to levels ‘which have not been seen in two years’. During the period, several vessels were omitted following Chinese New Year and a shortage of containers developed, thus contributing to ‘very difficult shipping conditions’. According to feedback from the UK, significant ‘softening’ throughout the second quarter was replaced by evidence of a slight increase in demand and prices for OCC at the start of this year’s third term, driven in part by demand from ‘one or two of the big mill groups’.

However, demand for mixed paper is described as ‘poor’, with some larger buyers currently said to be reviewing their approach to moisture and quality. ‘The UK witnessed some of the wettest weather in history throughout February, March and into April,’ it is pointed out. ‘This has meant that very wet cargoes have arrived in China; mills have not been happy with their yields and have thus been reticent about buying any more.’

France reports a continuation of the ‘hectic struggle’ to source material, with recycling industry players and paper mills competing with each other for business. Domestic collection volumes were lower during the second quarter, partly because of national holidays in May. OCC prices fell by Euro 10 per tonne at the beginning of the quarter and subsequently stabilised despite attempts by the mills to apply downward pressure. Abnormally for this time of year, buyers in France have also been seeking price reductions on some of the middle grades.

Germany’s collectors of paper for recycling witnessed a drop in available volumes in June, notably for the middle and higher grades. Special orders were placed for the middle and woodfree grades in order to satisfy demand. In the south of Europe, mills in Italy have continued to suffer as a result of energy costs and falling prices for their finished products. There has been no improvement in recovered paper values while low production levels among printers and publishers have led to a drop in the volumes of associated qualities available for collection. Spain has witnessed relatively stable recovered fibre pricing, with the exception of ongoing weakness among the deinking grades.

In the north of the continent, demand from paper and board producers in Finland was sufficiently strong in the second quarter to require OCC imports during June in order to supplement mills’ summer stocks. Meanwhile, an increase in Sweden’s fibre exports to Poland and Germany has been counterbalanced by higher collection volumes at home. When compared to the first quarter of 2013, Swedish mills’ total consumption of recovered fibre fell 16% in January-March this year whereas the country’s exports climbed 8% to 91 000 tons.

To the east, first-quarter figures from the Czech Republic reveal a 12% decline in recovered paper consumption by domestic paper mills and a 3% drop in collections, but a 2% upturn in fibre exports. Overall in this market, recovered paper has been ‘easy to sell’ and ‘no significant warehouse stocks have built up’.

In Turkey, meanwhile, the second quarter brought a ‘collapse’ – with OCC and mixed paper prices tumbling approximately 30%, partly because some mills stopped ordering from the local market. Demand is expected to remain impaired during the third quarter as two large mills will be closed for much of the period for machine renewals.