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BIR Paper World Mirror July 2016

Global – OCC export prices out of Europe climbed from US$ 160-plus per tonne at the start of the second quarter to around US$ 167-plus by its close. Gains were also recorded in mixed paper values, from US$ 115-plus per tonne in early April to US$ 130-plus by the end of June. Sea freights remained low over the period.

In the immediate aftermath of the historic decision by the UK to leave the EU, the pound weakened significantly. Allied to fibre shortages, prices for OCC shipments out of the UK to eager buyers in China increased by £15-20 per tonne while mixed paper values recorded hikes of around £30 in the second quarter and into July.

Also for the UK, prices of multigrade/SOW, office pack and the high grades have climbed £30 per tonne – and more in some cases – over the course of recent weeks. Across into France, recovered paper prices have shown a greater degree of stability – although at higher levels than in the same period last year.

Germany, meanwhile, ended the second quarter with healthy collection volumes and good demand from domestic mills, especially for mixed and supermarket grades as the cardboard industry looked to build their stocks. Prices for these grades increased slightly as a result. The second and early third quarter saw brown grade prices on a roller-coaster ride of ups and downs in Spain, with the start of July bringing an increase.

The key factors at play in the market of late have included increased demand from buyers in Asia, high stock levels and maintenance shutdown announcements. Staying in Southern Europe, major recovered paper players in Italy were still experiencing a substantial reduction in collection volumes during the second quarter.

The ‘relative scarcity’ of mixed paper and OCC is said to have created ‘consistent demand and strong competition among domestic mill buyers’, as well as price levels that, on occasions, ‘have exceeded those of the European market in general’. In terms of recovered paper developments further east, Poland has continued to be affected by the export embargo imposed by Russia against Ukraine.

Generally stable market conditions are reported for the Czech Republic, with stocks at normal levels, a regular flow to the sales of all grades, and few significant price swings. In contrast, the fact that paper mills in Turkey are operating at 70% of capacity has created a reduced demand for recovered paper.

In Northern Europe, municipalities in Finland have relinquished the responsibility of collecting from households and of ensuring onward delivery to recovered paper depots. The entire collection chain now becomes the responsibility of the producers’ organisation which is currently putting the finishing touches to a collection point network that should be finalised by the end of the summer.

In Sweden, meanwhile, OCC demand has been healthy and stocks are at normal levels. In Asia, the weakening of the rupiah has persuaded mills in Indonesia to focus on purchasing local material rather than buying in from abroad at greater cost and with longer delivery times. Indeed, orders from Europe and the USA have either been cancelled or postponed for arrival into August or even September.

European recovered paper exports to Vietnam were limited in the second quarter – to some extent due to quality considerations, it has been reported.

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