Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of MRW, please enable cookies in your browser

We'll assume we have your consent to use cookies, so you won't need to log in each time you visit our site.
Learn more

Asian buyers keep market afloat but concerns grow

The domestic price of old KLS has remained resolute at £45 per tonne despite a slight drop in the export level, with shipments to France and container loads to the Far East both said to be fetching in the region of £5053 a tonne. However, there are already murmurings of a possible reduction in the UK price in a few weeks from now unless there is a sudden and, to be frank, unexpected improvement in market conditions.

Mixed paper is continuing to attract £25 per tonne or above from UK mills but, once again, the export market has edged lower to around £3536 a tonne. The differential between domestic and export prices is still enough to ensure a continuation of the healthy flow of material to India and China that has been witnessed throughout the year to date. A leading merchant processor commented: The only interference has come from shipping rates and the strength of sterling against the dollar, although the initial wave of increased shipping rates seems to have eased back a little over the past few weeks.

Although India and China remain major buyers of UK material, neither of these markets are without their complications at present. Some ports in India are understood to be full to overflowing and difficulties are reported in obtaining sufficient container capacity. Recovered paper has a lower value compared with other products going through the ports and so it is not getting priority status, MRW was told this week. Meanwhile, anyone with an interest in the Chinese market is having to keep a watchful eye on latest developments relating to the countrys new registration scheme for overseas suppliers of recyclables. Temporary licences have started to come through but concerns continue to surround the tightening of inspection procedures by the Chinese authorities. A leading figure within the UK recovered paper industry suggested that isolated problems were leading to the rejection of entire shipments even if they comprised material from a number of different sources a reaction he described as harsh. If the Chinese were too free in their rejection of loads, he argued, then they would run the risk of losing good suppliers. Its the same as with the mills, he added. If a mill makes unreasonable quality demands, then it could find itself struggling to find its supplies or paying a premium.

Despite concern over the strictness of inspection procedures in China, leading lights within the UK export sector acknowledge that the wider push towards increasing quality levels will have a positive, long-term impact on the image of the recovered paper industry as a whole.

As for UK demand for packaging grades, mills appear reasonably content with current order positions while describing the outlook for the fourth quarter as a little uncertain and margins as a bit of struggle. A paper and board industry spokesman observed: There has been some pick-up in the main European economies and so there is less pressure on UK producers from imports. Equally, he added, mills were under no real pressure with regard to recovered paper stock levels.

Some slightly more positive noises have also come from the domestic newsprint sector, which has reported a slight upturn in newspaper advertising at national level although this has yet to be translated into significantly larger orders for their own products. Newsprint demand has shown no improvement over last years level but, on the upside, imports are said to have dropped by 45%.

As for de-inking grades of recovered paper, there were reports this week of a slight reduction in domestic prices for news and pams, as well as an approximately £3 per tonne fall in export returns. By contrast, prices paid for overissue news have held steady both for home and export business.

Following significant price reductions in May and June, tissue grades experienced no further weakness in July although consumption levels at some UK mills was reported to be significantly lower last month. Sales prices for the mills end products have suffered marked fa

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.