As sadly predicted pricing for recovered paper has deteriorated and quickly. OCC and Mixed pricing in Europe have seen a sizable fall in price of up to €50 per tonne, as many packaging mills take downtime because of high energy costs, lack of recovered paper and high finished stocks. Graphic papers and the tissue sector currently are not following suit, but it is anticipated that they will follow the lead of the packaging groups and start to drop pricing. Orders and off take for packaging are scarce and it is anticipated that the high pricing for recovered paper will quickly fall in the coming weeks.
Newsprint & Graphic Papers
Recovered paper supply continues to be low and paper mills continue to have low stocks, the demand for fibre from this sector is supporting good clean mixed papers, and the high pricing achieved in the finished goods is supporting the suppliers with the high pricing for recovered paper. However, it is anticipated that this sector will follow the packaging sector and reduced pricing will occur in anticipation of high energy costs in the coming weeks.
Packaging
As stated, the paper mills are offering limited orders for recovered paper, there is reduced demand for finished goods and a reduced sales price. Add to this increasing energy costs this has resulted in falling prices worldwide for recovered paper. Currently the UK has not quite followed the other markets but September prices we expect to see similar price levels as per other markets. Grades used in the production of white top are also in reduced demand as the production of packaging slows down.
Tissues
The continued lack in supply of necessary fibres has been driving the market with UK mills and Europe in particular short supply. However, in the UK it was announced last week that, Essity are investing £80 million, in their Northeast paper mill, to convert the paper mill to be able to use packaging grades in the manufacture of tissue. It is anticipated that this will happen across Europe, it is also noticeable that orders and pricing has been stable, we again anticipate that the market has reached its height and prices will reduce in the coming weeks.
Pulp Substitutes
As per the other sectors orders for these grades are becoming difficult and pricing has reduced already with certain customers. Pockets remain available but like all sectors it is a matter of time before reductions arrive.