Buoyant markets in Europe and the US are being held back by a shortage of containers.
North American recovered paper prices continue to strengthen as we reach the second half of 2021. Upcoming peak demand for agricultural packaging is expected to put further pressure on an already tight market for old corrugated containers (OCC) and other packaging grades.
As in all markets, scrap paper exporters in the US continue to report difficulties getting orders shipped, whether due to lack of containers, cancelled or delayed bookings, port congestion and other logistical problems. Major US seaports are reporting record traffic as imported merchandise continues to pour in and most containers are quickly being returned empty to China to be refilled. That, traders report, is squelching their ability to get containers for recovered paper exports.
In Europe markets, little has changed over the past few weeks as prices are still high and container availability remains terrible. It is mostly the local European market which is consuming most of the grades. India has been out of the market for weeks for brown grades but importers are buying good volumes of mixed and BBC. Thailand and Indonesia are importing consistently but only on a need-to-buy basis. During the summer months, mills in Europe are securing their volumes and therefore it is unlikely that prices will go down. It means a a stable market is expected throughout July and August.
Despite the potentially challenging US picture painted earlier, recovered paper exports during the first four months of the year were up 15% compared to the same time last year and OCC shipments alone were up 14%, based on data from the US Department of Commerce. January to April data for OCC exports suggests the full year 2021 can be projected at 10.8 million short tons – which would be 8% better than the pandemic-impacted 2020. That level would match 2019 and be 9% better than 2017.
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