Market Report
Occ on the move up
NL-Tilburg, 16 March 2025
The upward journey for the prices of low grades seems to have begun. Buyers in India in particular followed or outbid local European price increases in the past week. Buyers in South-East Asia have not yet made a decision to go along with the redeemed expectations of recovered paper merchants, which are mainly contacted by traders tumbling over each other to capture volumes for higher prices. But buyers from local paper and board mills are also showing their willingness to pay extra for additional volumes where the price does not match, despite being aware that it generates little more volume and most orders in exports concluded end of February or early March are still being loaded for the rest of the month.
How can it come about like this ? Part of the explanation is that the packaging paper and board producing mills have better orders and have also been able to increase sales prices leading to more need for raw material on the one hand and, on the other hand, with the higher selling prices, there is also room to reduce exports of recovered paper by paying higher prices. As far as that will work. For more raw material needed, demand is put into the market which accumulates, making it look that there are shortages. The same old song.
It has to be said that with regard to generation, no signs of improvement are seen yet. Fost Plus in Belgium this week gave estimated volumes of council collections whereby in February 17% and March 20% less would have been generated compared to December 2024 and January 2025 respectively. So, the focus will be on volumes that would normally go into exports, now that the European paper and board industry has suddenly put the foot down on the accelerator in order to catch up with export prices. This after having shrugged off export prices that at times were tens of euros per tonne higher. Often with inspection, but still.
Just waiting to see what will happen in the coming weeks, but with Easter on 20 April and many days off in various countries, demand will not immediately calm down. And finding sufficient transport for and around Easter will also be a challenge.
Incidentally, the market situation in the tissue and graphic paper industry is different. In that sector is still pressure on recovered paper prices, with the exception of one or two middle grades that are now more in demand. The closure of UPM Ettringen, southern Germany, announced this week, which should take place as early as July, is yet another indication that the supply and demand situation in graphic paper is not yet in balance. With a structurally declining demand for new paper, that balance may not come either. In any case, the press release said that UPM is determined to achieve a supply-demand ratio that brings profitable graphic paper production. Ettringen produces 270,000 tonnes of uncoated wood-containing paper, The closure will eliminate 235 jobs.
Plastic recycling crisis
Dutch newspaper FD presented another article on 5.3.25 about the “crises in plastic recycling”. The Waste Management Association, in consultation with as many as three ministries, indicated that at least €100 million is needed to maintain the infrastructure of collection, sorting and recycling. More and more bankruptcies in the sector would demonstrate this. The hype of “very” cheap virgin granulate with which the recycling sector cannot compete was pointed out, causing 100,000 tonnes of processing capacity to disappear. Very cheap? Yes, compared to $2200 pt in the 2022 hype, $1400 is indeed cheap. However, historically this is not cheap especially with low oil prices. And where regranulate moved between €1,000 and €1,200 in the same year for different grades, it is now €600 to €800.
Striking in this regard is that the purchase prices of plastic waste clearly have not proportionally dropped in price. How can that be ? Overcapacity in processing perhaps ? And that should then be maintained with €100 million support ? Or is there too much export ? That problem would then solve itself with the upcoming export ban on plastics. At the same time plastic recycling companies led by Euric are rallying against the export ban ?
The interests are apparently conflicting.
Stimulated by government and public opinion, waste companies have invested heavily in processing capacity that, with the exception of the 2022 hype, does not generate returns, no, lead even to hefty losses. Reason why Viridor in the U.K. closed its two plastic recycling showpieces and Renewi recently indicated it no longer sees any point in investing in their plastic recycling capacity.
Meanwhile, there seems to be something of a slight improvement in the recycled plastic market. Straw fire and thus short-lived ? Or the beginning of normalisation of the market ? And this perhaps due to bankruptcies and lower returns so that excess capacity is disappearing ? If the latter were the case, we know what the government's response to the Waste Management Association should be.
Price indication
Price indication in Europe for low grades of recovered paper, sorted, baled and ex works are now between € 40 and € 70 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.