Paper in the shadow of tariffs

Prices have shown little change since the previous report but any trade tariffs introduced by President Trump in the USA could have global ramifications in the industry.

The global paper and fibre industry faces both uncertainty and opportunity. A key theme for the year is an additional two million tonnes of fibre likely to be needed to feed new machines coming online in the next 12 months, particularly in Europe and North America.

Fibre supply will have to keep pace but many fear that sourcing this additional volume may lead to tighter markets and potential disruptions.

The impact of this looming fibre demand on the industry could push smaller, less competitive mills to consider consolidation or even closure. With margins already squeezed, smaller mills in Europe in particular are finding it increasingly difficult to operate without considering downtime as an option.

The balance between maintaining production levels and controlling costs will be a tightrope walk for many companies this year.

US: Little change

Demand and pricing in the US since the last report show little change, whether it is domestic or export. Although the generation of recovered fibre remains on the low side, mills are running below capacity, so the market is basically in balance. In Europe, prices have hardly moved in recent weeks.

Mixed paper remains stable, cardboard has seen a slight increase, while deinking paper has dropped slightly. Overall, the price structure remains largely unchanged. Supply and demand are fairly balanced and, even in the export market, only minor fluctuations in price and demand are noticeable.

Among the different types, only cardboard exports have shown a slight upward trend. Demand for new paper remains weak and production stoppages continue. Additionally, the economic situation in Germany is particularly concerning.

Tariffs, tariffs…

Globally, the big news has been the continuing drama of President Trump’s trade tariffs, and what they could do to consumer prices in the USA. Tariffs are expected and the marketplace is bracing itself for lower demand due to higher prices.

New trade policies and tariff shifts are likely to affect not only US-based mills but also the broader global paper market. For companies that rely on stable international trade, these actions could increase costs, disrupt supply chains and fuel market volatility.

One beneficiary of higher prices for paper could be plastics. Until now, companies have been in a mad dash to switch from plastic to paper-based packaging where feasible. If paper prices rise due to tariffs, the economic justification to switch over the plastic could prove difficult. We must wait a few months for the dust to settle.

US export data

Year-end figures for recovered fibre exports from the US do not paint a pretty picture. According to the US Census Bureau, the volume of all grades to other countries dropped to slightly over 12 million tonnes last year, versus nearly 13 million tonnes in 2023, the third annual decline.

OCC still commands the lion’s share of exported tonnes, followed by mixed paper. These two grades combined represent between 80-85% of all exported tonnes of recovered fibre from the USA. Something of a silver lining is the fact that domestic mills increased their consumption of recovered fibre in 2024.

However, exports fell nearly 900 000 tonnes and higher volumes from domestic mills are not enough to offset export tonnages. Net recovered fibre sales from the USA decreased overall, indicating less fibre was collected in 2024.

Read the full recovered paper market report in our latest issue >>