Take a look at this months paper recycling report.
Pricing for packaging grades increased again to the Far East by approximately £10 per tonne. We understand that this increase is due to the need to fill orders as it is felt that going forward in May order books and demand will be low, we expect weak pricing going forward.
As stated previously the European paper industry remains weak, continued high stocks and poor order books are keeping demand low. Pricing of recovered paper has remained reasonably stable only because the availability is poor, and many mills are concerned about lack of availability going forward. The only valve to reduce losses has been for mills to take downtime which is now common across many groups and mills in all sectors.
With the advent of new mill capacity of a further 3 million tonnes in Europe this year, it is expected that the market is going to become increasingly saturated for finished goods, pricing will be weakened and there it is anticipated that there will be casualties in this sector.
Newsprint & Graphic Papers
Pricing and demand in this sector are very weak, as a direct result of that confirmed above, add to this that UPM have announced and confirmed that they are only consuming 60% of their normal volume of recovered paper in Q2 2023. Pricing has reduced by £20 per tonne across the board. Availability of certain grades is now becoming greater. We anticipate further reductions throughout the quarter.
As confirmed pricing in April for OCC increased by £10 per tonne, however, we believe this to be short lived. It should be noted that the European mills also increased pricing in the main although there was the odd exception.
Mixed paper pricing remained stable again, it will be interesting to see how the grade also holds up in the coming months.
The PRN / PERN (Packaging recovery note) continues to support, this is currently running at between £30 to £35 per tonne levels which is historically high. It is anticipated that this could further strengthen at the end of April, if so, this could further support pricing for packaging grades in the short term.
The production of white top board also sees downtime and order books continue to be weak.
The folding box board sector continues with downtime across Europe. The box board sector uses high volumes of Mixed Papers, Scanboards, Multigrade & OI Pams. Pricing for recovered paper remains weak.
Prices and demand in this sector remain weak as mill stocks remain high across Europe. We have seen a further reduction again in Europe on pricing in this sector and the UK. Prices have fallen by £10 to £20 per tonne across the board for mid grades such as Multigrade and SOW.
Pulp sub grades pricing and demand is becoming under pressure as pulp prices have reduced and are continuing to reduce, we have seen pricing fall over $50. Pricing for BW’s and White mechanical grades have fallen between £30 to £40 per tonne across the board.
Pricing Prediction from Rick
As stated in previous months paper recycling report, we had hoped the spring would bring consolidation in inflation and some increased demand. In effect the opposite has occurred, and with continued reduction in the collection of recovered paper, this merely reflects the fact people are buying less which is confirmed in the reduction of production of paper and packaging. We are now faced with what is traditionally a strong period for the paper industry it is the weakest seen in certainly my working life.
There is a real concern that demand, and production will remain weak throughout 2023, and we are looking at a very challenging year. As it stands there are no signs that it will ease in the coming months or that there is any increased demand. If we also look at the Far East or developing markets for opportunities, it is hard to find any increase of demand or stability there either. The only hope is as the high costs of the winter retract and we enter the summer period, hopefully people may release the purse strings slightly, that the governments can restrict inflation and enable the public to effectively increase their spending.
Ever the optimist.