Tilburg, June 18th, 2017
Temperatures have gone up everywhere in Europe over the last days. A comparison with the recovered paper market cannot be ignored. So can currency movements have a significant impact on the recovered paper market. Whereas the rate of the U.S. Dollar is mainly leading for our prices in Europa, this goes also for the Japanese Yen, although to a lesser extent. With a jump of the Yen compared to U.S. Dollar and Euro earlier in the week, more demand was immediately felt from Asian countries that also buy (a lot of) recovered paper in Japan. It indicates the nervousness in the market. Prices for recovered paper in Asia are high because of high transport rates and strong currencies of exporting countries in comparison with purchasing countries. The sipping rates have started a descent over the last months and it looks like more rate reductions are underway. This last week for example, shipping rates to India went down considerably, leading to a deep sigh of buyers there. Only just recovered from the strong price increases in the USA purchases were more or less put on hold, but after the rate decrease, to certain ports even $ 300 per container, somewhat relieved the focus could be changed to Europe again. For the typical India grades in kraft and higher deinking grades, it meant extra demand and for several grades higher prices in Europe. Demand and the feeling of shortage obliges buyers to put all advantages in the ex works pricing in order to compete on the export markets in the U.S. and Europe. Because of less generation that picture won’ t be changed but will more likely be strengthened in the summer months. Both exporters and local buyers try to secure volumes. Lower transport rates will push ex works prices further up. If local buyers want to go along will also depend on possible available spot lots. After many months of continued demand there are no real stocks, so buying spot lots from non-existing stocks will automatically lead to price increases.
China: imports recovered paper lower in April
In April China imported a total of 2.267.000 tons of recovered paper. This was a reduction of 12% compared to April 2016. Accumulated for the year however China's imports with a total of 10.040.000 tons in the first four months were still over 5% more than in the same period of last year. The arrivals in April are still purchases of January/February, so expectation is that due to the strong price reductions in March, the import figures for May and June will go down significantly.
For the whole of 2017 it is likely however that with today's strong demand and the exports rebouncing in April, the total imports into China will be higher than in 2016.
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.
Look here at price chart