Pricing for recovered paper has increased in certain grades, generally around fibre shortage, which many mills are extremely worried about. Whilst reported last month that packaging finished goods stocks are increasing at the mills and this is reflected also in the tissue, this is not a dramatic as widely reported, indeed many mills are running at 8-week league times, and it should be noted that most paper producers are increasing the price of their finished goods. However, Graphic papers finished goods it is accepted that these are not increasing in the same fashion as the other sectors.
Therefore, the high pricing for recovered papers will continue for the foreseeable future until paper mills would possibly either take downtime (unlikely as demand for the finished goods are high and the packaging and Tissue sectors are making record profits) or in some areas the mills may change their furnish and look at other options than white (This relates to Tissue and White-top board). (By using other materials like cardboard to print directly on to brown instead of a “White coated board” (Packaging industry) or making brown tissue (tissue industry) instead of the traditional white tissue sheet, this will use less woodfree papers and mechanical papers reducing the demand and price), We are aware both sectors are seriously looking into this as the lack of available material is a worldwide problem, resulting from the decline in the print industry.
However, as we are all aware things can change quickly but the forecast that pricing will drop rapidly at the end of year appears to be less likely in the current circumstances.
Newsprint & Graphic Papers
As stated, supply is low and mills have low stocks, also it is known that there is extra demand arriving in Europe so we expect this could get heated over the coming weeks.
Demand for mixed papers is high in Europe and this is driving the pricing for all other grades. OCC there is high demand in Europe but the other markets like the far east there is real fall in demand, mainly driven by the lack of demand by China, therefore this grade price is stable. Grades used in the production of white top are in high demand as is pulp subs needed in the production of packaging.
The continued lack in supply of necessary fibres is driving the market with UK mills and Europe in particular short supply. This market will drive up the price for Multigrade and OIP’s, it should be noted that the tissue mills are making contingencies to move from traditional woodfree grades to packaging grades, be ready for brown coloured tissue paper.
Pricing for these grades remain strong as less pulp is available due to the closure of the Russian markets.