In June demand remained strong from Europe for recovered paper driven by a shortage in availability of recovered fibre.
In July, for de-ink papers and all publication paper grades demand remains high. However, in packaging we have seen a cooling off in both demand and pricing for recovered paper as mill stocks have steadied and finished goods have not achieved the increases that many mill groups had hoped. The far east market remains quiet with pricing around European markets.
Tissue paper mill group stocks remain low as publications papers and office paper grades remain in tight supply. Prices are therefore particularly high in the UK.
Newsprint & Graphic Papers
The price of News & Pams (N&P), OI Pams and OI News all increased, demand is high and availability in these grades low, European and UK mills are all very short on volume, and we have seen price increases of between €15 to €20 per tonne.
There is high demand from the UK, for Magazine grades
Packaging
We feel that pricing of recovered paper in this sector has peaked. Packaging mills across Europe have looked to either maintain or, where possible, reduce pricing. Stocks appear to be healthy but price increases and demand for finished goods has not achieved the levels that many mill groups had hoped for. However, availability of recovered paper is still low so there will be continued fluctuations over the coming months. Pricing is stable or down by up to £5 per tonne on brown grades.
It is noticeable that for the grades strong in fibre like 4.02.00 & 4.03.00, the pricing is stable, however, as with other brown grades, this is beginning to come down and we expect reductions throughout July.
With mixed papers pricing we are seeing a small reduction in pricing in Europe.
For Far East buyers, pricing remains below Europe but the difference is now a lot less.
The folding box board sector continues to see high prices in the UK. This is mainly driven by the tissue market in the UK (see below). Pricing in Europe is £30 per tonne below the UK market and we expect the UK to follow in the coming months.
Tissues
Pricing continues to increase by £10 to £20 per tonne. It is noticeable that all buyers acknowledge there is a lack of fibre available and tonnage is low. The instability in this sector is interesting, last week Kimberely Clark announced the sad news of the closure of the Flint paper mill, this will remove a volume of recovered fibre requirement from the market.
However, it should be noted that there will be several new pulp based, tissue mills in the UK by the end of 2025. It’s widely acknowledged that there is a real lack of recovered fibre suitable for the manufacture of tissue paper so this makes sense. We are seeing a switch from recycled fibre to pulp, as paper mills look for more certainty of supply in raw materials.
Pulp Substitutes
There is no change in demand or price of Pulp. We expect to start to see movements after the summer period and will keep you posted.
Pricing prediction
As discussed in June, in our opinion, we believe that packaging has peaked. We have seen the height of the market and now pricing is starting to stabilise or reduce. We believe we will continue to see strong demand and pricing of recovered paper for the UK tissue and graphic paper sector and with continued short supply and a declining market we expect to see continued high pricing. Our only concern is if pricing for recovered paper in these sectors becomes too high that mills may start taking downtime.
As we enter the holiday period, we do expect to see fairly stable prices and September will be in the interesting month to set the tone for the remainder of 2024.