December review
Price decreased again in all sectors in December, Mills had high stocks and with many taking closures across the Christmas period. Brown packaging grades reduced with small movements at the beginning of the month, however, it has been notable that pricing at the end of December to the Far East we saw pricing and demand start to improve. De-ink grades pricing and demand remained stable to small reductions, with 2 of the main mills in Northern Europe taking downtime across the Christmas period. poor demand and mill shuts meant further price reductions for middle grades used for tissue making and pulp substitutes – ranging from £5 to £15 per tonne.
January
Packaging
Orders to the Far East saw pricing for OCC increase by around £5 per tonne with good demand taking it back to the levels of November. European pricing for OCC remained stable in the main although some mills have started to react to the Far East purchasers with some small increases.
Mixed papers in all markets pricing remained stable.
Newsprint & Graphic Papers
January, we have seen reductions of £10 per tonne for pressroom grades like Over Issue News and Magazines. Down time continues to be a factor in this sector, with several mills closing for at least one week for “planned maintenance”.
Domestic News & Pam grade prices have remained stable.
Folding Box Board
Pricing has remained stable, but orders for grades in this sector remain weak as high stocks remain at the mills.
Tissues
Mill shuts & high stocks continue to cause low demand. Pricing is mixed, ranging from price reductions again in Europe of around £10 per tonne to stability and small price increase in the UK.
Pulp Substitutes
High stocks & low demand remains prevalent for the Woodfree Pulp subs. Suppliers and merchants continue to report high stocks. We do not expect to see changes in the Woodfree grades before spring.
Demand for the mechanical grades has improved with mills increasing their buying in this grade particularly in the sector producing board for sale in the building industry.
Price reductions for Woodfree pulp subs are around £10 per tonne. Mechanical pulp subs price has remained stable.
Pricing prediction
In January we have already seen a small recovery in demand from the packaging industry, particularly from the Far East. As confirmed, some of the Europeans mills have reacted to maintain supply. We suspect the collection data for January will be key to establishing demand across Europe in the early spring. If collections are down – as we anticipate – we could see demand and pricing for recovered paper increasing again.
With Essity Prudhoe starting production again in this quarter we expect to see pricing for recovered paper in the Tissue and de-ink sector in the UK also start to increase.
We are led to believe that the building industry in Germany is driving an increase in demand, so we expect to see further impact of this in both the Tissue grades and Pulp subs.
We look forward to this year with cautious optimism.