Market Report
American price increases come to an end
NL-Tilburg, May 12th 2024
For 2nd Ascension Day, our Dutch and Belgian depots are closed on May 20th
While prices for all grades of recovered paper in Europe were still rising in May, that has come to an end in the US. At least for now. Our colleagues in the US report of weakening pent-up demand and downtime again in the paper and board industry after a quarter of high machine utilization rates. Prices of most grades remained flat as a result with the exception of the lower de-inking grades, which rose some more, while wood-free de-inking grades went down. A totally different picture from what we see in Europe, then. In exports to Asia from the US, there were still small price increases of $5 to $10 per tonne for mixed paper and board, but like export prices in Europe, these give little reason to book many orders. Incidentally, with the recent price increases in Europe, the price differential between European and US occ (kls) has narrowed considerably and been reduced to normal differences based on fibre quality.
Question being asked in the US is whether the market is going to hold like this or whether a change may be on the way. Overall, generation is still far from 'normal' and on that basis, an overoffer is not immediately to be expected even if exports would not pick up for now. Similar opinions are also circulating in Europe, and with the expected further decline in the generation of lower de-inked grades in particular in the summer, a price increase of these grades is rather obvious. Incidentally, the term 'lower de-inking grades' that we use for mecanical overissues and their waste, at present, does not cover it. Indeed, some (ground)wood-free de-inking grades are priced lower than the mecanical ones . . . . But this too will eventually normalize.
As for the low grades, demand locally in Europe is unchanged and spot prices are also still achievable here and there. And given the still limited generation, little change is to be expected in this in the short term.
However, changes can sometimes present themselves quickly. Still only familiar with IP's acceptance of DS Smith's takeover bid, Suzano, the world's largest cellulose manufacturer, is said to have made a $15 billion bid on IP. An example of eating and being eaten ? Incidentally, questions about this were more or less dismissed by the relevant parties as 'no comment'.
From waste to waste
The English government has decided to start simplifying its collection system of recyclables. To get rid of all the different collection systems in England, they want to switch to co-mingled collection in all Councils, i.e. with paper and cardboard, plastic, glass and metal together in one wheely bin. So, switch from
bad to worse. Fine words of how great that will all be however overlook the huge task of recycling of these polluted streams at all, but the service and cost factor was also brought up. With regard to the latter, these would be measures to transfer the cost of recycling from taxpayers to the 'waste producers', presumably meaning the companies that put products on the market that becomes 'waste' thereafter. Apparently, there is still a perception that collecting mixed streams is cheaper. A misconception because the 'recyclables' sorted from co-mingled have much lower revenues and, in part, are simply not recyclable either because of the high contamination by beverage and food residues. And yes, polluters do indeed have to pay and so far at least the PERN system in England does not do so sufficiently. No, the councils do finance the ‘recycling’, so it comes to nu surprise that in general they are not doing well financially. But it is a 2nd fallacy that the extra cost to ‘polluters’ will be also absorbed by them. That is simply passed on in the final product and so it is the same taxpayers who pay for it. Not illogical. But more logical would be to make the whole recycling process as efficient as possible. That would make the system cheaper and so taxpayers would then also get less passed on in the products purchased. But that really takes a bit more than just putting everything in one wheely bin and then trying to recycle that by leading it through a 'waste in-waste out' MRF.
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.