Although prices remain low, US collections are picking up and export trends are brighter.
Several changes are underway in the USA’s recovered fibre markets at the moment, although prices still remain on the low side. Over the past year or so generation in MRFs and from major retailers has been soft. Now there are reports of some growth in recovered fibre tonnages being collected.
However, this is not from residential sources but rather from big box stores who are building up their holiday inventories. It remains to be seen whether ‘Black Friday’ will show enough pull-through by the consumer. Many think not.
From an export perspective, there are lots of dynamic things going on. The first is lower volumes from shipping lines, pushing down freight rates and many are seeing near record low pricing for containers.
Secondly, there are many major technical issues with the operation of the Panama Canal, with many ships having to wait many days, or even weeks, to get a slot to go through the canal. Meanwhile, Maersk has cut thousands of jobs this year.
Outbreaks of positivity
But the big news is that export orders are a bit soft in many regions, and due to that, prices are dropping. It seems that pricing on the east coast of the USA has fallen a little faster than on the west coast. The exception is double-lined Kraft: as high-quality fibre tends to be regularly in demand, prices have held up.
Due to the low generation, apart from the recent slight uptick mentioned above, domestic mill inventories remain low, just 6-8 days on average. While domestic USA mills are still buying due to low inventories, their manufacturing customers have filled their pipeline and shipped holiday inventories to retailers.
As usual, Containerboard mills might again take some fourth quarter downtime, which will certainly drive down demand and hence possibly pricing in the upcoming months.
Market conditions in Europe have generally been challenging with infrequent outbreaks of positivity. Indeed, the markets seemed to go on holiday in summer and never came back to any great degree. For a while there was demand from Turkey, Southeast Asia and especially India. However, even these destinations have eased off in recent days.