BIR Paper World Mirror June 2015

Global – The following article is based on the latest World Mirror on Recovered Paper produced by the BIR world recycling organisation for the benefit of its members.

Although the second quarter of 2015 began with generally lower prices, a subsequent shift in demand – notably from buyers for the large mill groups in China – served to boost export values. OCC prices climbed from US$ 160-plus per tonne to US$ 180-plus while mixed papers rose to US$ 140-plus. An increase in fibre demand is anticipated over the second half of the year, not least because of projected growth in emerging economies.

Among those countries planning new production capacity is Vietnam: Lee & Man Paper Manufacturing and Vina-Kraft are scheduled to install new machines during 2016 and 2017, although the government has also indicated that it will intensify regulations for paper mills in order to prevent imports ‘of doubtful quality’. In Turkey, meanwhile, Kartonsan’s KM2 started working at full capacity in the second quarter of this year while Modern Karton’s new liner mill – with an annual capacity of 400 000 tonnes – also came on stream during the period.

Smurfit Kappa is said to be ‘very close’ to full production with its new machine at Snodland in south-east England – a development that is expected to ‘add further heat’ to a UK market characterised by sustained demand, low arisings but suggestions of ‘some small price reductions’ of late.

The impact in the UK of the Aylesford Newsprint closure earlier this year proved ‘very short term’, illustrating that this was capacity ‘that had to be removed from the market in any case’ because of the wider decline in printed media. Meanwhile, a substantial drop-off in Asian demand for newsprint has led some mills in Indonesia to cut production.

Feedback from Spain suggests deinking market conditions have ‘totally shifted’ from the first quarter and demand has increased strongly, although prices ‘climbed later and to a lesser extent than for OCC’. White grades have remained in high demand and prices have risen slightly too, it is added.

In Germany, collection volumes have remained quite low while demand for almost all fibre grades has been ‘consistently high’. Lower-than-normal collections in Italy have been ascribed to ‘unfavourable economic trends’ while funding has been announced for municipalities in the south of the country in order to boost selective collections. In contrast, France is reporting a ‘good’ collection rate at a time of ‘satisfactory’ demand, with the high grades market said to be ‘moving upwards after years of consistency’.

Looking at latest statistics, the Czech Republic recorded a massive 19% increase in recovered paper collection volumes in this year’s first quarter, which would annualise to around 900 000 tons for 2015 as a whole – or some 100 000 tons more than in 2014. Finland, conversely, suffered a 6.7% decline in collections last year, with exports nosediving 27% ‘mainly because of good domestic demand’; these order levels remained high for all grades in this year’s second quarter, to the extent that some were imported ‘to cover shortages’ as all paper and board mills were ‘running well’. In Sweden too, kraftliner mills are ‘in full production’ and ‘healthy’ demand is anticipated for the remainder of the year; tissue grades are experiencing ‘quite strong’ market conditions with ‘historically high prices’.