Well at last, after what seems an eternity of reporting doom and gloom in the market, we are pleased to confirm some positivity. With the start of spring we have seen European paper making, make an entrance into the recovered fibre market. This is being mainly driven through a lack of available recovered fibre and an upturn in their own demand across it appears all sectors.
The far east, whilst not quite matching the European appetite, they have in some cases followed the price being pushed by Europe.
As predicted in March European mills appear to have achieved anticipated price increases in finished goods, demand has increased and packaging grades such as OCC and Mixed have seen a pricing increase in real terms by approximately £15 per tonne (higher in their own market less against the far east). The far east buyers continue to look to maintain volumes from Europe and this is also ensuring that demand is high.
Also as stated in March we expect for April and the remainder of the spring will remain strong and are already seeing the other sectors follow the packaging industry’s lead on volume for recovered paper and therefore price increases.
Newsprint & Graphic Papers
The price of News & Pams (N&P), OI Pams and OI News all increased, demand is high and availability in some grades low. We expect further increases in May.
It is also interesting that other sectors such as the packaging industry are now also looking for volume from this sector, particularly Magazines.
Packaging
As stated, pricing across the board up £15 per tonne. Price is now being driven by Europe not the far east, in certain grades.
Mixed Paper pricing saw large increases into Europe as lack of volume and increased demand are causing concern in supply. The UK mills have also started looking for volumes, spot volumes have increased dramatically and will continue throughout May as mills look to cover the long bank holiday weekends.
The folding box board sector is slightly out of alignment currently, but we expect this to follow suit.
Tissues
Pricing has increased as paper mill buyers acknowledge that there is a lack of fibre availability. Pricing in Multigrade has increased between £5 to £10 per tonne, but we expect this to continue further through the month as volumes and collections continue to be low.
It is also interesting the normal increase of volume from the shredding season has yet to materialise and there is now growing concern in this sector for a lack of volume.
Pulp Substitutes
Pulp pricing have moved slightly but we expect further increases as we are also seeing increases in pulp prices worldwide.
Pricing prediction
As confirmed in March the spring will be a good indicator for 2024:
- Demand requirements by paper mills for Europe have increased due to improved order books and low generation of recovered paper.
- Availability of recovered paper from Europe this we know is critically low in some instances and is now pushing increased recovered paper pricing.
- Is there enough capacity in the US to satisfy demands for the far east if Europe’s volumes are turned elsewhere? This remains doubtful.
The continued unknown is how long and strong the improved demand for the finished goods will remain and can the increase pricing sustain the higher cost of recovered paper.
But for now, we are seeing paper mills with improved demand and price. Coupled alongside reduced volumes but higher input costs which supports the recycling industry.