At the end of June, the packaging market in the Far East saw increased demand and a small increase in pricing by up to £5.00 per tonne and good orders. Conversely, in Europe we have seen high mill stocks, poor order books and falling pricing in packaging grades. Also, the other sectors in Europe – Graphic papers and Tissue – the market remains finely balanced and we have seen some small decreases in pricing. The European mills continue to look at opportunities to increase their tight margins by reducing input costs and we still believe that the low collections in the summer and the increased capacity in Europe will prove problematic with expected price increases during August/September.
Packaging
Packaging mills in Europe – prices have seen a decrease in, OCC 1.04.00 & 1.05.00 and mixed papers (1.02.00), by -€10. Far east pricing has increased by approximately £5 per tonne.
4.01.00, 4.02.00 & 4.03.00 (NKLS, Fruitbox and Kraft) grades pricing has falls in line of -€10 per tonne.
Newsprint & Graphic Papers
Pricing of Newsprint & Graphic papers is stable or small reductions. Poor availability of recovered paper for this sector will put large pressure on in the coming weeks. We expect price increases for recovered paper in August / September, but mills margin remains under tight pressure, so some have looked to reduce input costs.
Tissues
As per the Newsprint sector.
Pulp Substitutes
We have seen a large fall in pricing in Best Whites following reductions in Pulp pricing (around €20.00 per tonne). Mechanical grades remain stronger as demand for these from the packaging mills for white tops remain strong.
Pricing prediction
The summer period will see low collections throughout Europe. We believe for the Newsprint & the Tissue sector that demand remains stable, so as stated we expect to see increased pricing August / September.
The packaging sector is difficult to predict as there are mills that may use the opportunity to take down time, however, the demand for the far east is increasing, so with low collections increased consumption in Europe(ultimately), increased demand from the Far East, we expect price increases probably September.