Market Report

Shipping rates still going down

Tilburg, August 13th, 2017  

In South West Europe prices for occ in August moved down € 10 per ton this last week. In other countries similar reductions were announced, here and there also less. It made local prices still stay above export prices, though. There is little enthusiasm of the big Chinese buyers to purchase volumes at this moment. Basically everywhere in exporting countries their prices are now beneath local level. You then would expect local mills moving quickly south towards export prices, but nothing of the kind is happening yet. That could have two reasons. Generation is still limited and merchants have no stock, but liner board producers also try to increase their sales prices further. That does not match very well with price reductions of recovered paper. The price increases of packaging paper have not been done either. There is a lot of resistance of corrugated board producers who are unable to increase their sales price in any way or form. As usual however the paper industry is lacking behind with passing on the higher raw material costs, as became clear at the presentation of the lower results of Smurfit Kappa which, according to Tony Smurfit, were caused by an increase of raw material costs by € 75 million. Expectation was however that these still could be passed on to customers in the near future. So there is some catching up to do. Not impossible looking at the very good order books of the packaging paper producers. Not now anyway. Everything can change, of course. As far as exports are concerned, the wait-and-see attitude of the Chinese buyers might bring them some benefits, if it was only the ever decreasing shipping rates. Booking containers in September will surely be cheaper than now.  Slowly but surely rates keep on coming down, sometimes with $ 25 sometimes with $ 50 per container. Also important is that for certain destinations (not main ports) where recovered paper also


is shipped to, the transport rates went under the rates of the main ports. A phenomenon not seen before yet either. The U.S. Dollar appreciated a little but is still far from the ideal rate for exports. The Yen appreciated clearly against the U.S. Dollar, making Japanese recovered paper in export a bit more expensive again. All possible factors play a role on the market. Worrying for export to China is the announced import ban for contaminated plastics but also recovered paper grades. More towards the year end we hopefully we might know what can and cannot be brought into China. It is not possible yet to get that clear yet.          

China: imports recovered paper up in May

Imports of recovered paper in China were in May with 2.441.000 tons almost 8% higher than in the same month last year. In the first 5 months of this year there was an increase of 5.7% to 12.482.000 tons.
With 1.007.000 tons (41%) and 813.000 tons (33%) respectively the U.S. and Europe were the biggest suppliers in May, together doing almost 75% of the imported volume.

Price indication

Price indications in Europe for low grades of recovered paper, sorted, baled and ex-works are now between €130 and € 180 per ton. These prices are depending on quality, available volume, region and loaded weight.

Click here for the price chart, with prices of the last 10 years.

The price chart gives an indication of the price of mixed paper in the Netherlands free delivered mill over the last years.  Scrolling over the top of the colums gives the exact price indication in Euro's per ton.