Market Report
Pressure on low grades market persists
NL-Tilburg, 15 September 2024
Our comment last week that the order books of the (integrated) packaging paper industry did satisfy, apparently did not go down well everywhere. At least, we were also told that while there were sufficient orders, these were also the result of the necessary downtime. So no, it is not booming, but that can certainly be said of our sector as well. Not to mention the plastic and textile recycling activities. There, it is actually just crisis. Where it should be mentioned that even that expression is quite inflationary. It seems to be a crisis in everything and everywhere, but certainly not in recovered paper. There, people complain about less volume and that is true, but that is a structural trend going on in the graphic industry and we have to deal with that. In the recycled liner board market, there has been overcapacity for some time and that is not going to disappear tomorrow. It will, with new capacities on the way, get worse rather than better. And where previously European players could sell both finished and recovered paper to Asia, that has become a lot harder. Even in Asia, where China in particular is game-changing, things don’t look promising.
It seems that the persistently weak exports of recovered paper have claimed at least one victim. The Spanish representative of Synergie Tradeco, trading in recovered, reportedly informed suppliers that the Zwijndrecht, Belgium-based trading office would be bankrupt, that contact with the head office was no longer possible and that the website had gone offline.
So we have to conclude that with no improvement in export prices, regular local price cuts for the lower grades of recovered paper and less intake by the paper and board industry, the market is somewhat challenging. And that, while selling prices for those same low grades are still historically at high levels. The combination of all that does not bode well.
Prices for graphic recovered paper remain high, with high demand from the tissue and printing paper industry, precisely because of low volumes collected, and this maintains a price differential between occ (cardboard) and deink news and pam, for example, that may be difficult to sustain.
Having said that, the increasing percentage of packaging in paper
collected from households, or more the decreasing percentage of graphic paper therein, makes it increasingly difficult to produce deink news and pam cost-effectively which explains the big price gap between the two grades.
Furthermore, due to the same tissue and graphic paper producers' search for recovered paper with a high(er) brightness, quality requirements among their customers also appear to have tightened. With less demand for finished paper and board, the sales prices are pushed down and quality requirements up.
Conclusion: no major concerns for the recovered paper market yet, but vigilance is needed.
Price indication
Price indication in Europe for low grades of recovered paper, sorted, baled and ex works are now between € 60 and € 90 per tonne. These prices are depending on quality, available volume, region and loaded weight.
Look here at the Price chart >>
The price chart gives an indication of the price of mixed paper, separately collected, in the Netherlands free delivered mill over the last 10 years.
Scrolling over the top of the columns gives the exact price indication in Euro's per ton.