January review
Pricing increased slightly in the packaging sector for OCC in January, this was mainly driven by the Far East buyers. European buyers remained and markets remained stable. De-ink grades pricing reduced slightly although demand remained stable. Middle grades used for tissue making and pulp substitutes – as last year – poor demand meant further price reductions although small around £5 per tonne.
What we’re seeing in February
Packaging
Orders to the Far East saw pricing for OCC increased again by around £5 per tonne with good demand taking it back to the levels of November. Europe pricing for OCC also increased with small movements – this was to keep them in line with Far East buyers and concerns that supply could become tight in the coming weeks.
4.01.00, 4.02.00 & 4.03.00 (NKLS, Fruitbox and kraft board) – demand is increasing for all these grades, as the German mills seem to be increasing orders. We’re seeing small improvements in prices again and we expect to see further improvements in the spring.
Mixed papers in all markets pricing remained stable.
Newsprint & Graphic Papers
February pricing remained stable across Europe, although there are reports of magazine price reductions in Germany as UPM relinquished a number of their magazine contracts following the closures of their mills last year. We expect this to be short lived.
Domestic News & Pam grade prices have remained stable.
Folding Box Board
Stable pricing, again we expect increased demand in the spring.
Tissues
Prices have remained stable, however, there is room for optimism in this sector. The Essity Prudhoe paper mill re-started production in January.
Northwood have also recently confirmed the acquisition of the old Kimberly Clarke paper mill in North Wales. This will significantly increase the demand in the UK market in the coming months.
Pulp Substitutes
Across Europe we are beginning to see signs of recovery, as mills are beginning to look to purchase more material. Pricing has not increased but demand has so we expect to see positive price movements in the spring.
Price is stable for February.
Pricing prediction
It’s worth noting that moving loads into Europe via France has recently become difficult. The French authorities have introduced a new customs system and it is causing significant clearance delays at the border. As a result, vehicles are being held up and haulage costs are rising across the board – particularly for material going into mills in France and Belgium.
The positive news in the tissue sector will undoubtedly increase demand in the UK and we expect pricing to follow.
Demand for recovered paper in the packaging sector will continue in the coming weeks as supplies and collections are reduced. With this increase in demand, this will also put pressure on supplies for the de-ink markets and tissue.
We expect, that with the overall increase in demand, price increases will follow in the spring across all sectors.