Page 46 from: January / February 2014

Paper

46 January/February 2014

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

Closed: January 23 2014

Early-year rebound in
demand
As in 2013, supply rather than demand
has occupied most of the paper sector’s
thoughts in the early weeks of 2014.
Another key concern in the USA at the
start of this year has been the shortage
of containers, brought about in part
by shipping lines’ winter deployment
of equipment. As a result, experts
say, export movements may become
more problematic than normal.

Europe
Stocks not high
For all markets, demand has been much
better in the opening weeks of January
than it was in December. Meanwhile,
the volumes of recovered fibre entering
merchant processors’ facilities are gen-
erally satisfactory at a time of healthy
demand both for European and for Far

Eastern destinations. There is still not
much OCC available and stocks in
Europe are not very high.
Most European mills held their prices
in January despite plenty of demand,
mostly from Europe itself. As regards
the Far East, prices for the OCC grades
have returned to a reasonable level
following a period of lower demand.

Shipping has become easier and most
mills in China appear to have secured
their import licences.
Incoming volumes of deinking are at
normal levels but most deinkers are
now carrying large stocks despite good
demand in Europe; there is also some
demand from Asia, albeit at lower
prices. Healthy order levels are also
reported for most of the middle grades
in Europe while volumes are said to be
reasonable. As for India and other
Asian destinations, demand has
improved slightly – but again at lower
levels compared to European prices,
which have tended to stabilise or edge
higher.
For the high grades of recovered paper,
availability remains limited at a time of
good demand and so prices have
mostly firmed.
In general, the lower incoming volumes
– which have become something of a
structural problem for recycling plants
– have led to competition on the buying
side for which there is no margin. There
is a large differential now between the
price of good-quality 90/10 OCC and
80/20 OCC owing to issues relating to
China’s Green Fence import controls;
many Chinese customers are tending

to buy only 90/10 or 100% OCC.
Indonesia is buying, but at lower prices
than China; stocks in the former of
these two countries must be low given
the small volumes purchased over the
past couple of months. Fibre buyers in
Indonesia and also in India continue to
be compromised by the relatively low
value of their currencies in relation to
the US dollar.

North America
Steady outlook for 2014
With 2014 now several weeks old and
the Chinese New Year almost upon us
at the time of writing, recovered fibre

Changes announced at CEPI
Gary McGann, group ceo at leading paper-based packaging company
Smurfit Kappa, has succeeded Jussi Pesonen as chairman of the Confed-
eration of European Paper Industries (CEPI), the Brussels-based organisation
which represents more than 520 pulp, paper and board producing compa-
nies across the continent.
On his appointment, McGann argued that the industry suffers from ‘a lack of
a favourable business climate in Europe’, adding: ‘The EU needs to create a
complete single market and address areas such as energy policy. There is a need
for greater certainty in regulation and creating an environment for industry
which is enabling and makes business more efficient and more effective.’
McGann, who became ceo of Smurfit Kappa in 2002, is also a director of
the Irish Business and Employers’ Confederation.
It has also been announced that, after 10 years as director general of CEPI,
Teresa Presas has decided to leave the organisation at the end of May this
year. Her designated successor is Marco Mensink, who has been deputy
director general for the last two years. New CEPI chairman McGann com-
ments: ‘Teresa has turned CEPI into a highly credible and constructive
partner to the EU institutions that lives up to its members’ expectations of
bringing added value to the European pulp and paper industry.’

RI-1-2014-MA Paper.indd 46 29-01-14 15:22