Page 40 from: December 2016

40 December 2016

M A R K E T A N A L Y S I S

Paper
Closed: November 25, 2016

Shipping far from
shipshape
To the surprise of many, recovered paper
markets have been generally steady to
strong in November. On the down-
side, however, traders have continued
to experience shipping problems and
uncertainties, with some reports of
shippers erasing existing bookings
and then re-booking at a higher
rate. Even with the substantial rate
hikes of recent months, availability
remains a deep concern.

Europe
Unwanted uncertainty
Volumes have been normal to good in
terms of the lower grades of recovered
paper entering merchant processors’
facilities. However, there is not much
OCC available and stocks remain rela-
tively low in Europe.
While most European mills have held
their prices in November, some Ger-
man producers have been successful
in securing price cuts. For the Far East,
OCC values are around the same level
as those prevailing in Europe; demand
is very good for Europe and for most Far
East destinations. There is also excellent
demand for mixed papers, basically for
sorting into deinking and OCC.
The period of non-shipment to take
account of Chinese New Year will start
shortly. In November, shipping lines
either did not have space to offer or
did not want to give it, with reports that
some existing bookings were cancelled
and then re-booked at higher rates – all
of which adds to unwanted marketplace
uncertainty. Shipping rates are expected
to rise again in December but, on the
plus side, the Euro/US dollar exchange
rate has been compensating for some
of the freight cost increases.
Deinking demand is very good in Europe
and some orders for Asia have also been

placed at slightly lower prices; with
regard to volumes, the market appears
to be in reasonable balance.
Demand is also healthy in Europe for
all of the middle qualities of recovered
paper, with archive grades particularly
sought-after. Prices have been stable
for most grades, although some have
moved upwards. Among the higher
grades, demand is good at stable pric-
es for the limited volumes of material
available, although woodfree unprinted
white has shown some weakness.
Prices of all grades are expected to
remain stable in December, with per-
haps some downward correction for
OCC.

North America
Surprising strength
After more than a year of rhetoric, the
US presidential election concluded with
the announcement by the Cuyahoga
County Solid Waste District in Ohio that
campaign yard signs can be recycled –
perhaps appropriately – into toilet paper
and other products. Regardless of how
the signs are processed, Americans on
both the winning and losing sides of the
vote are happy to see them disappear.
Meanwhile, the strength of sorted office
paper (SOP) and other deinking grades
has continued to surprise recovered
paper traders. The national SOP mill
price in November improved by around

US$ 8 to an average of US$ 182 per ton
FOB seller’s dock, according to a survey
by The Paper Stock Report. That marked
a 32% improvement compared to a
year earlier, at which time SOP prices
were at the end of a US$ 25 tailspin to
around US$ 138. Whereas SOP prices
started to weaken in August 2015, the
opposite has occurred this year as prices
have been climbing since August. Trad-
ers, however, believe deinking grade
markets may have peaked in November,
citing lower demand from Mexican tis-
sue mills towards the end of the month.
Domestic markets for OCC have also
remained surprisingly strong. Mill prices
have generally held at a national aver-

Progress in Europe’s paper recycling rate
The paper recycling rate in Europe reached 71.5%
in 2015 and thus edged slightly above the 71.4%
registered in the previous year, the European Recov-
ered Paper Council (ERPC) has reported. Compared
to 2010, collection and recycling has increased by
almost 1 million tonnes while the recycling rate has
climbed by 3.5 percentage points. Indeed, the rate has
jumped almost 10 percentage points over the course
of the last decade.
Last year’s rate of 71.5% is 1.5 percentage points higher
than the target set by the ERPC in the European Decla-
ration on Paper Recycling for the period from 2010 to

2015. Referring to the EU’s Circular Economy policy,
ERPC chairman Henri Vermeulen says the paper fibre loop
‘can serve as the perfect model for circularity’.
In 2011, the ERPC made a commitment to meeting and
maintaining a voluntary recycling rate target of 70% in
the EU plus Switzerland and Norway by 2015, as well
as to reaching qualitative targets in areas such as waste
prevention, eco-design and research & development.
‘Currently, a new ambitious commitment for 2016-2020
is being prepared,’ the ERPC points out. ‘This will keep
the industry moving on its path towards ever-higher
recycling rates.’