December 2023 – Market Report
As we near the end of the year, we can report that at the end of November, we saw price increases for OCC to the Far East of £10 per tonne. In Europe we have seen many mills confirming downtime and price reductions in most sectors, with many mills taking the Christmas period as an opportunity to remove capacity from the market as well as taking completing necessary maintenance.
The Far East markets increase again seems to be driven by one of the largest Far Eastern importers, we are unsure how long this price will hold, and we believe is linked to the need to get stock in before Chinese New Year starts in mid-January.
As stated in November it appears to us that demand now will remain flat across most markets, so pricing is unlikely to increase certainly in our opinion until past the end of the first quarter.
It should also be noted that there will be further pressure on price in the German markets as the German government has introduced a road tax for hauliers increasing freight costs in some instances by over €100 per load.
Newsprint & Graphic Papers
The price of Mixed Paper in comparison to News & Pams (N&P) has ensured enough pressure is in place for the price of N&P to remain stable.
(N&P’s are sourced directly from mixed papers in many instances)
OI Pams price has remained stable.
OI News appears also to be stable.
It will be interesting to see the price situation after the Newsprint pricing has been agreed for 2024 across Europe, when this is confirmed in early January.
Packaging
As stated, there has been an increase in pricing at the end of November for OCC to the Far East with pricing increasing by approximately £10 per tonne.
Pricing in Europe for OCC has either remained stable or reduced depending on the mill group you deal with. The price differential between Europe and the Far East remains high and increasing over £20 per tonne in certain areas. It should be noted that many mills in this sector are taking extensive downtime during the Christmas period.
Mixed paper pricing has remained reasonably stable, with again a pricing gap between Europe and the Far East roughly equating to the same as OCC.
The UK mills are quiet and purchasing only contracted volumes, little to no spot volumes available.
The folding box board sector continues with downtime across Europe, but we have seen continued demand from the Far East as well as the Tissue market for the box board grades.
Tissues
Demand has fallen dramatically with many mills taking downtime in this sector, the away from home business has been severely hit and as stated a lot of mills across the UK and Europe are now taking the Christmas period to close to reduce production. This has seen price reductions in all grades of between £5 to £10 per tonne. We expect downtime in this sector also.
Pulp Substitutes
As November pulp pricing has reduced as many of the larger off-takers have reduced purchasing because of weak demand. Prices has fallen again in this sector by €10-€30 per tonne. It should be noted that this markets main demand is Europe.
Pricing prediction
We anticipate that it is very unlikely that paper production and demand is going to improve in the short term. There appears to be some hope that the economic situation across Europe may start to improve in Q2 2024. But it is unlikely that we will start to see demand improving before then with high energy costs and the cost of living continue to increase for many families during the winter months.
Finally let me take this opportunity to wish you all and your families a merry Christmas and hopefully 2024 will be a better year in paper, printing and recovered fibre.