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Feature: Class 1 grades show good recovery

UK mill stocks of recovered paper headed south in July of this year while consumption was broadly similar to that of the same month of 2004.

Meanwhile, UK paper and board production declined 2.2% in July to yield a cumulative total for the first seven months of this year of 3.574 million tonnes - 80,000 tonnes lower than was recorded for the January-July period last year.

Recovered paper inventories slid 11.4% in July, with stocks of Class III newspapers and magazines nose-diving 22.4% to 34,737 tonnes after having jumped 16.3% in the previous month. Supply at the prevailing rate of usage dipped to 1.1 weeks at the end of July from 1.5 weeks a month earlier.

Stocks of Class IV high grades followed up a 12.2% decline in June with a further 9.5% fall in July this year to 18,924 tonnes. Therefore, having stood at 1.7 weeks at the end of May this year, supply had dropped to 1.3 weeks some two months later. Having slumped more than 20% to just over 41,000 tonnes in June, mill stocks of Class II corrugated and kraft suffered a more conservative 2.7% decline in the following month to 39,892 tonnes, with supply unchanged at 1.1 weeks.

In contrast to the other recovered paper segments, latest statistics illustrate a stout recovery in stocks of Class I mixed grades. At the end of April this year, the inventory stood at just 4,169 tonnes. Increases of 21.5% and 50.1% in, respectively, May and June carried the stock total to 7,606 tonnes and supply from 0.6 to 1.3 weeks. The inventory improved by a further 1% in July to 7,683 tonnes, although supply at the prevailing rate of usage actually fell back to 1.2 weeks.

Overall, UK mill stocks of recovered paper reached the end of July at 101,236 tonnes - 11.4% down on the 114,278 tonnes recorded at the end of the previous month and a whopping 30.3% lower than the 145,287 tonnes accumulated at the end of July 2004. This was despite the fact that stocks of mixed grades were 57.3% higher at the end of July this year compared with the same stage last year.

An analysis of latest consumption figures from the Confederation of Paper Industries reveals that the 0.8% decline in July this year to 385,640 tonnes was attributable to a 10% dip in the corrugated and kraft total to 157,198 tonnes. In July 2004, consumption of this class of recovered paper had been 174,600 tonnes.

Elsewhere, consumption levels recorded the following increases in July this year: mixed grades up 7.6% from 25,649 tonnes in July 2004 to 27,610 tonnes this time round; newspapers and magazines up 6.2% from 128,435 tonnes to 136,461 tonnes; and high grades up 7.3% from 59,973 tonnes to 64,371 tonnes.

Looking at the January-July period as a whole,
consumption of corrugated and kraft was 6% lower this year than in the corresponding period of 2004 at a shade under 1.154 million tonnes. However, the totals for the other three classes of recovered paper traced a move in the opposite direction: consumption of the high grades improved by 8.4% to 451,331 tonnes, mixed grades were up 5.5% to 186,530 tonnes and news-papers and magazines posted a 5.1% increase to 899,341 tonnes.

Class II corrugated and kraft also had a major influence on the mill intake picture in July this year. The monthly total of 155,527 tonnes was 12.6% behind the 178,049 tonnes recorded in the same month last year, while the running total for January-July 2005 of 1.127 million tonnes was 8% below the 1.224 million tonnes of last year. By contrast, intake of mixed grades jumped 10.6% in July this year to 28,300 tonn

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