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China cooler on imports of recovered paper

China – In Europe, export prices for the bulk grades of recovered fibre have suffered steep declines after buyers for the Chinese market opted to severely limit their purchasing activity.

For the UK, a large proportion of whose annual recovered paper exports of around 5 million tonnes are destined for China, OCC values have slumped from approaching £150 per tonne (Euro 177) in the first quarter to below £80 (around Euro 90). The decline has come despite decent demand in the UK and good orders from Continental Europe.

Chinese buyers have cut their recovered fibre orders in reaction to falling containerboard prices at home, thinner order files, generally more-than-adequate stocks of both recovered fibre and finished product, and steepling shipping freight rates. A UK recovered paper market expert comments: ‘China has pressed the reset button – prices had simply gone too high.’ And according to a buyer for one of China’s major containerboard producers, prices are likely to struggle to improve greatly in the near term.

Plummeting prices have only added to the uncertainty prevailing in European recovered paper circles. This has been fuelled by, among other factors, strong rumours that China intends to intensify its inspection criteria as part of its National Sword initiative.

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