‘Drastic deterioration’ in recovered paper market

Global – Escalating freight costs, cheaper pockets of global availability, high levels of finished stock and possible compliance concerns relating to increased port inspections in China have conspired to deflate international prices for the lower grades of recovered fibre.

This decline has followed a relatively positive first quarter, according to the majority of country and regional reports submitted to the BIR world recycling organisation’s latest World Mirror on Recovered Paper.

Feedback from the UK – by far Europe’s largest exporter of recovered fibre – suggests deep-sea export prices for OCC have slumped to almost half their peak levels of the first quarter. The sharp adjustment is seen as a reaction to a number of factors, including shipping rates from the UK to China soaring some 400% in roughly nine months to around US$ 2000 per container.

‘Prices have fallen sharply in April, with scant orders for overseas markets,’ it is reported from France. But as regards European paper mills ‘with their well-filled order books’, demand for fibre remained strong in early April and prices fell ‘less steeply than in the export market’.

The major price decrease for OCC was also expected to affect the deinking grades, according to feedback from Spain.

Towards the latter stages of the first quarter, Europe was generally slow to realise ‘a drastic deterioration in market conditions’ was imminent owing to Chinese buyers ‘suddenly’ opting to stop purchasing in the USA in response to a sharp drop in finished product prices at home, it is argued from Indonesia.

For Vietnam, the collapse in recovered paper prices has ‘made imports possible again and profitable production easier’.

In other developments, there was not enough recovered paper available in Turkey in the early months of this year, triggering an upturn in imports. Following an improvement in weather conditions, however, expectations are of downward pressure on prices.

Editor’s Tip: Curious about the global paper recycling market? Look out for our report of the bvse paper conference, which will be published in the upcoming issue (#3) of Recycling International.

This article is based largely on the latest World Mirror on Recovered Paper produced by the BIR world recycling organisation for the benefit of its members.