Page 59 from: August 2015
Paper
Textiles
Closed: July 27, 2015
59August 2015
leading to higher prices. Pulp values
have also increased considerably since
the beginning of the year, making these
high grades of recovered paper an
attractive option.
North America
Mexican spot buying
Domestic OCC markets are claiming the
spotlight this month. Mills in the south
east and south west of the USA are
busy seeking tonnage in their regions,
and are also expanding their reach into
the Midwest and north east in their bid
to fi nd what they need. New mills in
central Mexico have made some spot
OCC buys, and have been aggressive in
central and southern Texas in their
attempts to build good inventory.
Chinese mills have cooled off from an
earlier active run-up in orders for OCC.
Demand for recovered paper was rising
because of speculative purchasing, but
several export buyers had to sell unsold
tons when the markets turned down-
wards. Others on the US West Coast
have reverted to warehousing their
inventory until markets strengthen. The
strong US dollar continues to keep buy-
ing somewhat contained.
The mixed paper and news markets
remain in balance. Demand for higher
quality No. 9 news is somewhat stron-
ger with the traditional summer domes-
tic pull from insulators and mulchers.
Deinking grades remain moderately
abundant, especially as Mexican mills
are trimming their orders. SOP supplies
are also plentiful, according to consum-
ers. Some buyers have built inventories
in anticipation of tighter supply in Sep-
tember. A few West Coast export sup-
pliers of white ledger are holding on to
their inventories, awaiting market
improvements. Meanwhile, the high
grades and pulp substitutes are devoid
of any signifi cant upward or downward
buying/selling pressure at present.
Chinese imports of US recovered fi bre
amounted to more than 1.4 million
short tons in April, the fi rst time this
threshold had been exceeded in over a
year. However, the year-to-date total
after four months of 2015 was broad-
ly similar to that for the same period
last year at approaching 5 million short
tons, according to the US Census
Bureau. US corrugated and newsprint
exports to China increased by, respec-
tively, 4.3% and 6.3% in the latest
January-April period whereas mixed
paper shipments dipped just over 1%.
Asia
Why the high prices?
In contrast to the strong demand from
China in May and June, the country’s
demand for the brown grades has been
dropping off since mid-July. Basically,
China was the only market in Asia
which was buying at high prices, receiv-
ing no competition from Indonesia,
India or any other country in the region.
Indeed, many collectors were left to
wonder why the Chinese were prepared
to pay these high prices, especially as
they are now slowly pushing them
lower again; the decline at the time of
writing has been US$ 5 per tonne, with
a further US$ 5 reduction widely
expected. However, there is also a belief
that prices will not drop to the levels
seen in January or February this year –
not only because collection volumes are
poorer in the summer but also because
demand is healthy in some key supplier
regions, such as Europe.
Recent weeks also brought an
improvement in the SMP price and, to
a certain extent, in news & pams val-
ues, whereas all other grades have
remained largely the same.
Import demand from India remains
extremely poor as the mills appear able
to source the bulk of their requirements
locally. Pakistan has bought only low
volumes too from the international
market.
By Mehdi Zerroug,
(Framimex, France)
Concern over
negative end-
market signs
Relatively good productivity from
winter collections of originals lim-
ited the traditional shortage of raw
material faced by sorting plants in
the early part of the year.
Accordingly, sorters carried rela-
tively low stocks of raw material to
guarantee supply for production,
leading to a position in April this
year when inventories and collec-
tion volumes of originals were
insuffi cient to satisfy sorting needs
at the start of the high spring col-
lections. Demand was therefore
good throughout the spring period
and until July, with all collected
quantities fi nding their markets at
stable prices.
Demand for originals has remained
broadly stable but sorters are now
expressing concerns about nega-
tive signs in the end markets for
sorted goods. Despite an accept-
able level of demand, prices have
been tending to decrease and pay-
ment problems have appeared in
several markets.
Prices of wipers and of wool mate-
rial for recycling have been on a
constant downward curve, reach-
ing negative values for some items.
Amid such uncertain conditions, all
market participants are being very
careful in their strategic choices.
Contributing to the
Recovered Paper Market
Analysis:
• Melvin de Groot (Van Gelder
Recycling, the Netherlands)
• Mariëlle Gommans
(Bel Fibres, Belgium)
• Joel Litman (Texas Recycling/
Surplus Inc, USA)
RI-6 Analysis Paper&Textiles.indd 59 05-08-15 15:57
