In the September market for the recovered paper, we have seen some price improvement, for OCC and Mixed papers we have seen increases driven again by demand from the Far East. The European market for all paper sectors, whilst not as buoyant, it has started to show some appetite for demand which is more positive than the last 3 months.
Our expectation for Q4 is that we will see an increase in demand from the paper mills in Europe for the Christmas period and increased stocking of product for the Far East markets, but this will tail off at the back end of the quarter. The market is finely balanced.
Newsprint & Graphic Papers
Demand seems to have strengthened but this must be stressed from a very low starting point. Paper mills continue to consume only contracted volumes, but it is noticeable that availability is becoming less.
OI Pams with high brightness (so mainly Super Calendared) continues to be in demand across several mills in Europe to help increase the brightness of their Newsprint.
Pricing for all De-ink has stabilised this month, we expect an upturn in price in October as stocks and volumes deplete in September.
Volumes of N&P across Europe continue to diminish as the gap in price between Mixed and N&P is making it less attractive to separate, with this in mind we are expecting an upturn in price of N&P as volumes fall and the De-ink mills start to need to replenish their stocks.
As stated, pricing again increased in this sector as OCC from the far east saw an upturn of £5 per tonne. In Europe prices also increased slightly but not to the levels being quoted from the Far East, it is noticeable that the Far East price compared to Europe for OCC there is a £20 per tonne differential.
Mixed paper equally there is a gap in pricing for Europe and the Far East which roughly equates to around £10 per tonne. In both markets we have seen an increase in demand.
The folding box board sector continues with downtime across Europe, but we are seeing higher demand from the Far East in this sector.
Prices and demand in this sector are again finely balanced we see still low demand in Europe but Asia is also entering the market for these grades and availability is down. We have seen stability and small increases in pricing, we expect stronger demand in October.
Pulp pricing has seen an increase in the last few weeks, so there has been a slight increase in some Pulp sub grades pricing. However, this demand could turn quickly, price generally stable to small increase in September.
September stability, but room for some optimism. We have seen some demand from certain quarters and some increase in pricing mainly in packaging grades.
Quarter 4 will be dependent in Europe on the performance of the German mills and if their economy shows further signs of recovery, but as we know this can be precarious. We still suspect that October will be the strongest month in terms of demand and price. We then expect demand will fall away in November and December, as mills always produce less during these months.
The Far East demand will remain the main positivity in the recovered fibre market.