As ever, demand and pricing varies across markets and geographies. During September, within the packaging sector, we saw a slow down of demand and pricing across Europe, (in particular Germany) but fairly stable demand from the Far East.
In the de-ink sector, we saw relatively good demand with stable pricing, in the tissue sector, we saw much the same, until the end of the month when UK demand started to cool off.
Pulp prices continued to fall, and we saw reductions in pricing on pulp subs across September.
October outlook
As we approach October, further price reductions in packaging for Europe were confirmed and pricing for the Far East showed a small reduction.
Interestingly, we have seen reports of a mass port strike on the east coast of America, with no exports leaving the US from this coast until it is resolved. This will certainly hit the exporters of recovered paper, to both Europe and the Far East. Europe could see a lack of supply of pulp, pulp subs and strong fibred recovered paper. The main sectors we see affected would be the packaging and de-ink mills.
The Far East buyers may find themselves unable to purchase large volumes of cardboard and mixed papers that are normally shipped to the far east. If the strike continues for any length of time, we expect that the Far East will divert their purchasing to Europe in order to meet their demand. This will all become clear as we progress through October.
Newsprint & Graphic Papers
The price of News & Pams (N&P), OI Pams and OI News has been stable. Availability and stocks remain low, particularly in magazines, this will be affected by the lack of imports from the US if the strike continues for any length of time.
Packaging
Packaging mills across Europe continue to reduce pricing. Stocks are high, order books are weak and many mills, particularly in Germany, are taking downtime. OCC 1.04.00 & 1.05.00 prices reduced around €10 per tonne.
4.02.00 & 4.03.00 grades pricing which had been much stronger than OCC, again reduced less dramatically than the previous two months and in line with OCC by €10 per tonne.
Mixed papers, we have seen less of a reduction of around €5 per tonne. This is mainly due to the Newsprint mills still having strong demand for N&P 1.09.00
Far East buyers demand and pricing remains stable. Demand seems reasonable and interestingly, price now differs to Europe, as it did in mid year, of £20 per tonne. We expect this to grow even higher if the US strike really takes effect.
Tissues
Demand and pricing for tissue has remained stable in Europe. However, after a number of months, the UK pricing has decreased by £5 to £15 per tonne. This brings the UK price more in line with Europe.
Interestingly, we saw the UK demand dramatically reduce at the end of the month as stocks across the UK remain high and a number of the mill groups taking down time.
Pulp Substitutes
Pulp pricing continues to fall, but this could change alongside the US situation. Prices at the beginning down between £10 to £20 per tonne.
Pricing prediction
As always, the market is difficult to predict, and the US export situation could certainly significantly affect the market if it continues for any length of time.
However, our opinion is, that for the last quarter of 2024, demand will be slow & pricing will weaken in all sectors. We also feel that quality of the recovered paper will be key throughout these months as paper mills will look to reduce costs throughout.
As stated last month we expect a tough few months at the end of 2024.