Page 46 from: April 2013

46 April 2013

m a r k e t a n a l y s i s

Paper
Closed: April 5 2013

Demand holds as shipping
issues intensify

Over recent years, the immediate

aftermath of the Chinese New Year

holidays has developed into a pivotal

period for the recovered paper sector.

And 2013 proved to be no exception,

not least because of a quality

inspection crackdown in China and a

renewed push by shipping lines to

implement freight rate hikes.

ly lower prices. European values have
tended to stabilise or climb slightly
against a backdrop of rather slow sup-
ply owing to reduced economic activ-
ity. And for the higher grades, demand
remains good for the low volumes of
material in circulation, resulting in
stable to slightly higher prices.
In general, the US dollar is influencing
price and demand. Order flows
resumed following the Chinese New
Year holidays but certain ports in China
itself have been enforcing very strict
quality controls, leading to added costs
and longer waiting times. The controls
are also very strict in Rotterdam,
prompting a number of traders to stop
shipping to China for fear that these
inspections will result in higher costs
or even a requirement to take back
containers.

North America
‘Green Fence’ impact
In March, OCC export prices slowly
increased with each week; and so far
in the first few days of April, prices have
slowly decreased. Export values for
mixed paper have also been falling.
Most of the lower buying prices are
from Chinese purchasers.

US paper recov-
ery dips in 2012
According to the American Forest
& Paper Association (AF&PA),
65.1% of paper consumed in the
USA last year was recovered com-
pared to 66.8% in 2011, with
respective totals of 51.092 million
tons and 52.767 million tons.
‘Our industry’s success in paper
recovery is due in large part to the
voluntary, market-driven product
recovery system that we and so
many others have fostered,’ notes
AF&PA’s board chairman and
Graphic Packaging International
president and ceo David Scheible.
‘We will continue supporting educa-
tion programmes and initiatives that
help drive awareness to increase
recovery.’
Since 1990, the annual recovery
rate of consumed paper has nearly
doubled in the USA, and the indus-
try is on track to recover more than
70% annually by 2020, it is claimed.
The recovery rate has dipped five
times since 1990 when the AF&PA
began setting recovery goals.

Europe
Severe inspections
For merchant processors, incoming vol-
umes of the lower grades of recovered
paper have been very low of late owing
to a combination of difficult weather
conditions and reluctant economic activ-
ity. There is not much OCC available and
stocks are not particularly high.
In Europe, where demand is reason-
able, mills tried to keep their prices
stable in March but OCC values
improved slightly. For exports to the Far
East, OCC prices increased on the back
of good demand – only to decline sub-
sequently in response to more severe
inspections by the Chinese authorities.
Mixed paper prices have followed a
similar pattern.

For routes to the Far East, shipping
lines announced their intention to seek
higher prices – and then kept vessel and
container availability very scarce to
ensure that elevated rates gained some
traction in the marketplace. Also for
shipments to India, freight rates appear
to be rising.
For the deinking grades, volumes enter-
ing merchant processors’ facilities in
Europe have been generally lower than
the norm too. Demand is good in
Europe whereas business booked in
Asia has been generally at low prices.
Orders for most of the middle grades
of recovered fibre have been reason-
able to good in Europe; decent demand
has also been coming from India and
other Asian destinations – but at slight-

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