Page 97 from: Recycling International September/October 2025
PAPER
Domino fears for
recovered sector
US OCC capacity down 10% this year, fuelling concern the growing use of secondary fibre in the sector could be
undermined.
89recyclinginternational.com | September/October | 2025
CONTRIBUTING TO THE RECOVERED
PAPER MARKET ANALYSIS:
• Myles Cohen, board member VIPA, USA
• Chris Burton, managing director IWPP, UK
• Henk Meinen, recovered paper market analyst,
the Netherlands
ing and selling activity during the
month noticeably slumped. While such
seasonal softness is typical, it’s unusual
for it to blanket all sectors simultane-
ously. Paper packaging mills across the
UK and Europe are operating below
capacity and have instituted wide-
spread downtime, even outside nor-
mal maintenance schedules. Brown
grades (like mixed paper and brown
cardboard) are particularly underper-
forming, with mills reluctant to take in
material at previous volumes or prices.
Deinking and tissue segments in the
UK have also seen lower-than-usual
activity, with some major sites per-
forming planned maintenance, com-
pounding softness.
Export interest remains tepid. There
are no strong signs of a rebound from
Asia and even interest from countries
such as Vietnam, Malaysia and
Indonesia remains cautious.
Current indicators show little evidence
of an Autumn turnaround and the mar-
ket is likely to remain muted or flat.
AUTUMN BLUES?
Many had pinned hopes on September
bringing a turnaround, with returning
demand from mills and buyers. Last
year, insights noted that while holiday
periods generally stabilise prices,
September was likely to ‘set the tone’
for the remainder of the year. However,
current indicators show little evidence
of that happening yet – demand
remains soft across all sectors.
Barring sudden demand from Asia,
improved freight conditions, or a shift
in FX, the market is likely to remain
muted or flat. The usual seasonal pick-
up is not apparent – instead, summers’
structural weakness is appearing across
all fronts. A true recovery may require
stimulus from stronger downstream
demand or policy intervention.
inking grades were also heavily affect-
ed. Tissue producers have reported
recovered paper as a raw material
being replaced by the primary raw
material cellulose. The stated reason:
too little supply of suitable recovered
paper grades. All in all, the market
remains very quiet.
A small positive point is a slight
improvement in exports, albeit with
strongly fluctuating volumes. Asian
buyers, due to the ‘thin’ market in
Europe, see a chance to push down
prices.
NEW ASIAN CAPACITY
While many speak of overcapacity in
the paper market, insiders report that
new capacity is still being added. For
instance, Minhan Paper Joint Stock
Company is starting a new OCC line at
its site in Van Lam, Hung Yen, Vietnam
with a capacity of 700 tonnes per day.
Meanwhile, Asia Pulp & Paper (APP)
has reportedly been running tests in
Jakarta since the end of July with a
new high-grade linerboard machine.
At 700 000 tonnes per year, the com-
pany would be the largest producer of
this outer layer of cardboard boxes.
US: IN BALANCE
Back to the US, the market is kind of
‘in balance’ and while pricing might be
going down a bit for export in some
markets, any dollar changes are in the
single digits. On the coasts, there have
been very few changes in domestic
demand and pricing has either been
holding steady or, in some weeks,
down but a few dollars per tonne. In
the Midwest, however, there has been
some slight increase in demand but
again pricing is holding steady.
However, there has been some move-
ment in demand and hence pricing for
DLK & Double Sort OCC and high
grades such as sorted office paper.
These grades track closely to virgin
pulp pricing, which has dropped
recently, so pulp substitutes have also
fallen. The market for container freight
exported from the US is stable.
EUROPE ACTIVITY DIPS
With August being a traditional holi-
day period across the UK and EU, buy-
A U T H O R Robin Latchem P H O T O Shutterstock
Major change in the paper packaging
market in the USA could have a signifi-
cant domino effect for recovered
paper markets. The containerboard
and corrugated box market is down
about 3% for the first half of 2025 ver-
sus 2024: the first half of this year saw
two of the weakest quarters in over 15
years.
Paper mills and box plants continue to
close. In the first eight months of the
year, nearly four million tonnes of USA
containerboard capacity was shut
down, representing nearly 10% of
industry capacity. While most were
from mills consuming virgin pulp,
many also used recycled content,
mostly OCC. Previously, major produc-
ers such as International Paper, Smurfit
WestRock, Georgia Pacific and and
Greif would weather the storm with
temporary shutdowns or slower pro-
duction schedules. No longer.
LOW GENERATION
Recovered paper businesses have to
take note because the USA’s OCC
today has a higher mix of recycled con-
tent. Soon there will be around 50% vir-
gin and 50% recycled in containerboard
production: 15 years ago, it was more
like two-thirds virgin and one-third
recycled. While the total ‘pie’ for con-
tainerboard may have shrunk, the
amount needed from recycled content
will not go down, which will put pres-
sure on pricing in the future.
In the US, while generation is slowing,
it is not driving up prices because the
paper packaging market is equally
soft. Risi/Fastmarkets quoted a major
containerboard producer as saying
‘Generation seems lower than typical
at this time of year, which is being off-
set by lower demand.’
EUROPE’S TRIPLE WHAMMY
This summer, the western Europe mar-
ket has been down on three fronts:
demand, supply and prices. As in the
US, decreased demand for recovered
paper is a direct consequence of the
declining demand for new paper.
Many mills have opted for down-time
rather than closure.
The decline in Germany has been sig-
nificant. Most striking is that the de-
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