Market Report

Resistance for higher prices growing
 

NL-Tilburg, May 19th 2024

For 2nd Ascension Day, our Dutch and Belgian depots are closed on May 20th and our Englsih depots are closed on May 27th for May bank holiday

Another week on and again no major moves by paper and board mills in Asian countries in the search for European recovered paper.  It is acknowledged that, given the high local prices in recovered paper exporting countries, prices for occ (cardboard) and mixed paper should be adjusted upwards, but at the same time it is reported that the resistance of converters to pass on the cost of more expensive raw materials in finished paper and board prices effectively makes this impossible. Nonetheless, some buyers did then go up by $5 or $10 a tonne for occ (kls) compared to last week, but that still does not put prices above local (European) levels. So, the position of Asian mills is, it seems, we cannot afford higher prices for recovered paper and will only start thinking about it when the stock position of recovered paper makes it necessary. We will then have to wait for that.

With other grades, including de-inking and certain middle grades, a similar position is taken by European buyers. Price increases of graphic paper are tough to implement and that is not going to get any better in the short term with the prospect of a strike in the German printing industry. So, producers of finished paper have already (partially) gone along with the prices demanded by suppliers of recovered paper with much resistance, but there is little appetite to go any further.  So, we will have to wait and see how the market develops. There has so far been no increase in generation either, as was expected.

This and several other factors such as exports, which could be affected by lower shipping rates, are going to shape the market in the coming weeks.
But there is also resistance to rate cuts among shipping companies, and the paper and board industry cannot afford even higher raw material prices. In other words, the pain among many market players is great and it could well be

that all these influences will eventually lead to a status quo on the recovered paper market. It looks a bit like that at the moment, although it has to be said that recovered paper prices are so high that it is hard to believe that they can rise much further. Also, given the limited volumes collected of waste paper, it seems that the small growth in the European economy, with some countries also still in recession, is not being realized in sectors that require graphic paper or packaging. In short, should there be any increased economic activity at all, it may also bypass our chain.

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.