UK sectors continue to enjoy demand recovered paper market while recovered paper mini crisis bites.

“As I type this, recovered paper – specifically OCC / mixed grades – is going through a mini crisis as the effects of a big reliance on export start to bite. Since the financial crisis at the tail end of 2008, cargo movement from the Far East into the developed economies of the US and Europe has contracted month on month in line with the austerity measures being taken by government, business and individual consumers alike. As a consequence, the shipping companies have also had to re-examine their capacities and in doing so, have inadvertently had a potentially detrimental effect on the recycling trade as a whole. In essence, less containers coming into the country means less available for loading back out of the country. As Ireland especially relies heavily on containers for moving its recovered materials, this affects both prices and material movement at least in the short term. It follows that the most abundant materials are most acutely affected, and in our case OCC and mixed paper will be affected the most. Estimates are that this situation could last for up to 2 months, however every cloud has a silver lining and when material can again move freely, we anticipate (but don’t guarantee) a brief “boom period” as mills will need material more than ever at this stage, having being temporarily starved for the preceding period.
 
Pulp prices again rose slightly in March by $20 - $30 p ton and the tissue market reacted somewhat cautiously by increasing prices for grades such as SOW and printers material by between £3 - £5 p ton. Tonnage in this sector is moving freely and is less susceptible to international events such as shipping logistics and currency fluctuations as it is still very much a local market for these grades.
 
De-ink / news grades remained stable with no movement in prices from the bulk buyers, however niche users felt it prudent to increase prices slightly for over issue news in order to secure supplies from an ever contracting marketplace.
 
The UK market in all sectors is enjoying a period of demand in polar opposition with what is happening across the international paper making industry. With new capacities either currently in line or being planned for the immediate future, this is undoubtedly propping up somewhat prices and requirements and is overall good news for the paper recycling industry in the short to medium term.”
 

Stephen Duffy
Managing Director
Highlander International Recycling