Market insights for August 2023 shows the market for recovered paper to be flat, with little or no demand. However, OCC and Mixed papers for the far east bucked this trend with price increases in both grades in the UK, driven by demand from this market and low shipping rates. But depressed markets continued in Europe for all paper sectors. Poor sale prices for finished goods continue and low demand from end markets for all paper grades, packaging, graphics papers and tissue. Added to this the normal seasonal low makes for a very flat market.
Our expectation for September is similar to August but we expect some increase in demand in Q4 from the European paper mills ahead of the Christmas period. 2023 will remain a tough year.
Newsprint & Graphic Papers
Pricing and demand remain low, paper mills continue to consume only contracted volumes. At the end of July, it was confirmed to us that UPM, their production levels year-on-year in Germany had crashed. In 2022 German consumption had been at 120k tonnes-per-month for recovered paper, but in July 2023 this had fallen to approximately 40k tonnes-per-month. Indeed UPM, the highest consumers of De-ink recovered paper in the world, at the end of July confirmed that they are only purchasing contracted volumes from the UK.
OI Pams with high brightness (so mainly Super Calendared) is in high demand across several mills in Europe to help increase the brightness of their Newsprint.
Pricing for all De-ink again has been driven down by £10 per tonne.
Volumes of N&P continues to diminish across Europe as the gap in price between Mixed and N&P is making it less attractive to separate. Interestingly this also seems to be encouraged by the Newsprint mills who are out-paying high prices for Mixed to sort but reducing pricing for sorted News & Pams?
As stated, pricing slightly increased in the UK as the far east pricing increased by approximately $10 per tonne. Despite a weakening Prn value & all-time-low shipping rates we saw a £5 to £10 per tonne increase for OCC to India and other far east markets. In Europe prices remained stable but with very low demand.
There is some hope that demand will re-enter the European market in late Q3 early Q4.
The production of white top board continues to see downtime and weak order books.
The folding box board sector continues with downtime across Europe, the box board sector uses high volumes of Mixed Papers, Scanboards, Multigrade & OI Pams. Scanboards, Multigrade & OI Pams have all reduced by €10 in this sector.
Prices and demand in this sector remain weak as mill stocks are high across Europe & the UK, it has been described to us that this is because of a very weak from home market. Prices in Europe remained stable for August but there are much reduced buying levels.
The UK this month is bringing itself more in line with European pricing and has reduced pricing by £20 per tonne across the board. Many paper mills have reduced purchases and volumes.
Pulp sub grades pricing and demand continues to be under pressure as pulp prices reduce again, pricing down €10 per tonne in Europe.
Quarter 3, as stated last month, is a tough quarter with low demand, reducing price and little optimism being shared from buyers at the paper mills. Last month we had hoped that we would exit Q3 with low stocks at the mills and increasing demand from consumers, packaging plants, printers, publishers & retailers all gearing up for Christmas. We could see some stabilisation in the markets and an increased demand. Whilst hopeful, the signs now aren’t great, we await the end of September to see where we will be.