In August we saw indicators from mainland Europe, Germany in particular, that demand was beginning to slow down, especially in the packaging market. It was also noticeable that demand and pricing for the far east remains stagnant.
Graphic papers, in particular publication papers grades, saw stable demand in the UK and Europe. This is because of low stocks and little availability in these grades for De-ink mills.
However, in the tissue sector we have seen a strong downward movement as mills have high recovered paper stocks. With pulp prices falling in previous months, we have seen tissue mills take advantage of the optimal pricing, consequently, this has led to a reduction in demand for recovered paper in the UK.
September, we have seen reductions in demand and price across all sectors. There are a few pockets/mills that are looking to fill up their stock levels, but we expect reductions to continue across the board in October.
Newsprint & Graphic Papers
The price of News & Pams (N&P), OI Pams and OI News has seen small reductions, as the industry looks to follow the packaging industry in the value of recovered fibre. However, availability and stocks remain low, particularly in magazines.
Packaging
Packaging mills across Europe continue to reduce pricing. Stocks appear to be healthy but order books aren’t as strong as we hoped for. OCC 1.04.00 & 1.05.00 prices reduced around €10 per tonne. It is also noticeable that many mills are looking to take shuts across the month.
As in August, the grades strong in fibre for packaging, like 4.02.00 & 4.03.00 pricing which had been much stronger than OCC, again reduced dramatically by €30 per tonne (minimum) This was as mills in this sector scaled back production.
We have seen a reduction of around €5-€10 per tonne in mixed papers.
Far East buyers demand and pricing remained stable compared to August pricing. There doesn’t seem to be a major appetite from Far East buyers to increase their off-take as demand from Europe falls.
The folding box board sector has seen stability in pricing but we expect to see reductions in October.
Tissues
In Europe, demand and pricing weakened throughout August and in the UK pricing increased by £5 per tonne.
However, as stated last month we had felt that the price had peaked. What we are seeing in the UK this month, is consistent pricing but a reduction in the use of tissue grades from the majority of mills. This is causing bigger volumes to be left available.
Pulp Substitutes
Pulp pricing has fallen by minimum €10 per tonne, as pulp prices fall, expect further reductions in October.
Pricing prediction
Looking across European markets in particularly Germany we can see that order books for a lot of paper mills are weak. Interestingly the Tissue sector, which is a stable market, we are seeing lots of downtime as the demand (we assume) for the away from home sector diminishes as the economies continue to weaken. The graphic paper sector seems to be different as the mill groups involved in this sector have taken the tough decision to remove excess volumes, however, as we know things can change very quickly.
As we enter the last quarter we anticipate price reductions across the board, particularly in Europe. There doesn’t appear to be much demand from paper mills and indeed many German buyers are already looking to reduce volumes. We expect a quiet few months of low demand as highlighted by one mill group, who has confirmed that the opening of their new paper machine is being pushed back to early 2025. With the limited appetite from the Far East to take on excess supply, we expect a few tough months ahead.