At the start of March we have seen pricing in both the Far East and Europe increase on packaging grades such as OCC and Mixed paper, this has been driven by low availability of recovered paper and with many mills in Europe wishing to increase their stocks in preparation for Easter. Prices on these grades have risen by £5 to £10 per tonne in some instances.
In Europe, the packaging paper mills have looked to increase their sales price for testliner so it appears that demand is also increasing, so signs are more positive. The Far East buyers are also looking to secure volumes from Europe as availability out of the US remains low.
If the demand remains strong we expect for April and the remainder of the spring that we will see the other sectors follow the packaging industry’s lead on volume for recovered paper and therefore price increases will likely follow.
As stated last month we predicted that the beginning of March would be a good indicator for the rest of the year, and as hoped we are seeing some signs of recovery and increased demand for material. Hopefully the paper mills will have strong order books, demand will increase, and supply of recovered paper will meet these requirements.
Newsprint & Graphic Papers
The price of News & Pams (N&P), OI Pams and OI News was all stable, demand and availability seem also stable. But with pricing increasing on Mixed papers this could turn very quickly. We expect upwards movement in April.
Packaging
As stated, pricing across the board up £5 to £10 per tonne. The price differential between Europe and the Far East remains but is closing.
Mixed paper pricing saw small increases into Europe but again we expect this could increase during the month, as lack of volume will hamper the market.
The UK mills have started looking for volumes, spot volumes have increased this may increase further by the end of the month before Easter.
The folding box board sector continues to show signs of recovery with increased purchasing.
Tissues
Pricing has reduced with 3 of the 4 major producers in the UK having issues with production at the mills and weak demand from Europe as collections increase for “shredding season” (End of the financial year and documents are shredded). Office grades like SOW have reduced in price as has spot purchases. However, demand for Multigrades and “book stock” remain stable we expect that these grades again will increase in demand by the ned of the month. Pricing down on office grades but stable on Multigrades.
Pulp Substitutes
Pulp pricing remains stable.
Pricing prediction
As confirmed March will be a good indicator for 2024, and that there are lots of factors that will dictate this:
- Demand requirements by Paper mills for the Far East and Europe.
- Availability of recovered paper from Europe and the US will it satisfy demands for the Far East?
The indicators are now good that demand has improved slightly in particular packaging grades, and that supply and low collections will drive the price upwards for recovered paper.
The only unknown is how strong is the demand for the finished goods and can the increase pricing sustain the higher cost of recovered paper. We will wait and see.
“Hold on to your hats and enjoy the ride”.