Thanks to Asian demand, European waste paper prices stabilized in November, what about December?
After falling for three consecutive months, prices for recovered kraft paper (PfR) across Europe began to stabilize in November. Most market insiders reported that prices for bulk paper sorting mixed paper and board, supermarket corrugated and board, and used corrugated container (OCC) remained stable or even increased slightly. This development is primarily attributed to good export demand and opportunities in the Southeast Asian market, while demand from domestic paper mills remains sluggish.
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“Buyers from India, Vietnam, Indonesia and Malaysia were very active in Europe again in November, which helped to stabilize prices in the European region and even led to a small increase in prices in some regions,” a source pointed out. According to market participants in the United Kingdom and Germany, the prices of waste corrugated cardboard boxes (OCC) have increased by around 10-20 pounds/ton and 10 euros/ton respectively. Contacts in France, Italy and Spain also said exports continued to be good, but most of them reported stable domestic prices, and warned that the market would face difficulties in December and early January, as most paper mills planned to carry out heavy production over the Christmas period. shutdown.
The downturn in demand caused by the shutdown of many paper mills in Europe, relatively high inventories on both sides of the market, and weak exports are the main reasons for the sharp drop in the price of bulk paper products in recent months. After falling sharply for two months in August and September by around €50/ton or in some cases even more, prices in Continental Europe and the UK fell further in October by around €20-30/ton or €10-30 GBP/ton or so.
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While price cuts in October pushed prices for some grades to near zero, some market experts had already said at the time that a rebound in exports could help avoid a complete collapse of the European PfR market. “Since September, Asian buyers have been active again in the market, with very high volumes. Shipping containers to Asia is not a problem, and it is easy to ship material to Asia again,” one source said in late October, with others also Hold the same opinion.
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India ordered a larger quantity of products again, and other countries in the Far East also participated in the order more frequently. This is a good opportunity for bulk sales. This development continued in November. “Prices of brown grades in the domestic market have remained stable after three months of sharp falls,” a source notes. Purchases by local paper mills remain limited as some of them have had to cut production due to high inventories. However, exports help stabilize domestic prices. “In some places, prices for exports to Europe and even some markets in Southeast Asia have increased.”
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Other market insiders have similar stories to tell. “Export demand continues to be good and some buyers from Southeast Asia keep offering higher prices for OCC,” said one of them. According to him, the development was due to delays in shipments from the US to Asia. “Some of the November bookings in the U.S. have been pushed back to December, and buyers in Asia are a bit concerned, especially as the Chinese New Year approaches,” he explained, with buyers mainly concerned about buying in the third month of January at the latest. week. With the U.S. economy slowing, the focus quickly shifted to Europe. ”
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However, with the arrival of December, more and more industry insiders said that Southeast Asian customers are becoming less and less willing to pay relatively high prices for European PfR. “It is still possible to win some orders at reasonable prices, but the general trend does not point to more export price increases,” one of the people said, warning that the global packaging industry is expected to see a large number of shutdowns, and by the end of the year, the global PfR demand will quickly dry up.
Another industry source said: “Inventories of raw materials and finished products are high across the European packaging industry, and more and more factories have announced long shutdowns in December, sometimes up to three weeks. In the approaching Christmas period, traffic Problems are likely to increase as some foreign drivers will return to their home countries for an extended period of time. However, whether this will be enough to support domestic PfR prices in Europe remains to be seen.”
Post time: Dec-15-2022