At the start of November, we have seen price reductions for packaging grades to the Far East, but in Europe we have seen in some sectors stability in pricing for recovered paper even though all markets remain in a weak position.
Downtime for mills remains common, with many mills preferring to remove capacity than increase costs against poor order books.
The price increases in September and October for the Far East markets seem to be contained around two of the largest Far Eastern importers wanting to ensure that supplies arrive before the end of the year. Now this has been achieved this has reduced the demand and pricing has fallen back to pre-October levels.
It appears to us that demand now will remain flat, so pricing is unlikely to increase certainly in our opinion until past the end of the year.
Newsprint & Graphic Papers
The price of Mixed Paper in comparison to News & Pams (N&P) has ensured enough pressure is in place for a small increase in N&P.
OI Pams price remained stable across all sectors.
OI News appears to be in reasonable demand also, with some movement upwards in price.
As stated, there has been a marked reduction in pricing at the beginning of November for OCC to the Far East with pricing reducing over £20 per tonne.
Pricing in Europe for OCC appears to have remained stable, but it is again worth noting that the price differential between Europe and the Far East remains over £20 per tonne between the two markets.
Mixed paper pricing has remained reasonably stable, although there has been some reduction from the high end Far Eastern markets, there also remains a pricing gap between Europe and the Far East roughly equating to the same as OCC.
The UK mills have followed also followed the pricing of the Far East and reduced there pricing accordingly.
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.
Demand in this sector remains finely balanced, the away from home sector has seen a reduction in demand as less people are going out due to the increased in costs during the winter period faced by many. This fall in demand and ample mill stocks have seen price reductions in all grades of between £5 to £10 per tonne.
Pulp pricing has reduced as many of the larger off-takers have reduced purchasing because of weak demand. Prices have fallen again in this sector by €10-€15 per tonne. It should be noted that this markets main demand is Europe.
With this downturn in November, we anticipate that it is very unlikely that pricing in all recovered paper sectors will be positive before the New Year. Demand remains weak and it is clear that most Paper groups are consolidating their positions until the spring as economies across the world look to stabilise theirs.