Page 56 from: June / July 2008

Mills opt for summer down-
time

Confronted with weaker sales conditions as a
result of the widespread economic down-
turn, many paper producers in Europe and
North America have already signalled their
intention to take periods of downtime
during the summer months. Meanwhile,
North America’s recovered paper export-
ers in particular have continued to suffer
the impact of a container shortage.

Paper
Closed: June 18 2008

56 June/July 2008

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

Europe
Mills look to cut prices
In general terms, Europe’s producers
are striving to lower raw material
purchasing prices in response to slower
demand for their own finished products.
As a result of these reduced sales,
stocks of new product are mounting in
both Europe and the Far East.

ment in the volumes entering mer-
chant processors’ yards.
There has also been evidence of a
slight weakness in the price of best
whites. Overall, however, the market
for high grades of recovered paper
remains relatively stable. Incoming
volumes have not been particularly
high in recent weeks.
According to statistics presented to
the recent BIR Paper Division meeting
in Monte-Carlo by its President Ranjit
Baxi, the UK accounted for more than
36% of all of the EU’s recovered paper
shipments to China in the first quarter
of this year – equivalent to 685 202
tonnes. In second place came the
Netherlands on 23.5% followed by
Belgium on just over 10% and Ger-
many on slightly more than 8%.
Meanwhile, figures from the Confed-
eration of Paper Industries and HM
Revenue and Customs confirm that UK
exports of recovered paper sustained a
downward adjustment towards the
end of the first quarter after having
surged to an all-time monthly record
of more than 520 000 tonnes in Febru-
ary this year. Overseas shipments in
March totalled 395 256 tonnes – a
decline of 4% when compared to the
same month last year.

Industry experts have suggested that
this steep decline was the result of
Chinese buying activity passing its
peak in the run-up to the Beijing
Olympics, which take place in August
this year. There were also indications
that some buyers in China had
possibly over-ordered in the early
weeks of 2008.

North America
Export headaches continue
No major changes have taken place in
the North American recovered paper
markets over the course of the last
month. The markets – and export busi-
ness in particular – have continued to
be dominated by a lack of containers.
All ports in the USA are reporting con-
tainer shortages, especially for mate-
rial going to South East Asia and the
Far East. In addition, container rates
have continued on their upward trend
and further price increases have
already been announced for July this
year. In addition, fuel charges have
been increasing almost on a monthly
basis to make life for the recovered
paper exporters even more difficult.
Container shortages and freight rate
hikes are not limited to North America:
these are global problems which,

Volumes of the lower grades of recov-
ered paper entering merchant proces-
sors’ facilities have returned to more
normal levels but remain relatively low.
European mills have been demanding
unexceptional quantities of recovered
fibre and lowered their prices in May –
but to a lesser degree than had been
expected. Asian buyers have come back
into the market at slightly higher price
levels compared to April; indeed, their
prices are substantially higher than
those prevailing in Europe.
As for deinking material, post-con-
sumer volumes are at normal levels. In
common with the lower grades of
recovered paper, export prices are
higher than those available in Europe
and are continuing to firm. While
demand from the European producers
is stable, orders from the Middle East,
South East Asia and the Far East are
described as somewhat healthier.
The prices being paid for the middle
grades of recovered paper are broadly
similar in Europe and Asia; however,
some of these prices have been sub-
ject to a little weakness in recent
times. Demand for all of the middle
grades is said to be reasonable in
Europe, India and other Asian destina-
tions. There has been a slight improve-

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