The closure announcement from Sunderland Paper has had an immediate dampening effect on best whites prices in the UK. Noting that the mill was a large consumer of best whites No 1 and No 2, a leading industry spokesman commented: “Best whites is now an export grade because all the other UK users really only take small volumes.”
Towards the end of November, the best whites
price was said to have fallen by some £5 per tonne and further downward pressure was widely anticipated. Unlike in all other areas of the domestic recovered paper trade, “stickiness” was reported in moving some of the higher grades.
As for the packaging grades, there is talk of a possible KLS price reduction in the near term even though demand has been strong and stocks are relatively low. This downward pressure is based mainly on a perceived surplus of OCC in the US which has led to the introduction of slight price reductions by American sellers. This move, in turn, was expected by some to impact on UK and wider European sales into China. However, KLS exports were still being concluded at prices up to £64 per tonne — well ahead of the £45 per tonne (excluding the odd premium) available on the domestic market.
Details of China’s import mix were revealed at the recent BIR Autumn Convention in Milan. According to Ranjit Baxi of Wanstead-based J&H Sales International, vice-president of BIR’s paper division, the US shipped some 4.522 million tonnes of recovered paper to China in the first seven months of this year while Europe supplied 2.485 million tonnes, including almost 800,000 tonnes from the UK. Thus, the US claimed a 47.5% share of China’s overseas purchases during the January-July period while Europe accounted for 26.1%.
Baxi’s statistics suggested that a third force was emerging in terms of supplying the voracious needs of the Chinese market. Japan provided China with a monthly average of 164,217 tonnes of recovered fibre in 2003 but, in the first five months of this year, that figure had risen to 285,816 tonnes with OCC accounting for 129,523 tonnes. In the first seven months of this year as a whole, Japan claimed an 18% share of China’s recovered paper imports.
Among the other grades of recovered paper, the UK’s overseas sales of top-end mixed paper have continued to attract prices of, typically, between £40 and £43 per tonne, while the domestic price range has remained unchanged for months at £25-£30 per tonne. Despite reports of a fall in prices paid for deinking material in France, the wider export market has remained firm.
Following a flurry of domestic price increases in September and October, UK stocks of tissue-making grades now appear relatively healthy for the time of year. Here, too, there is talk of downward price pressure, but any such move will depend on printers’ activity levels and is considered unlikely this side of the Christmas period.
Latest statistics suggest that UK tissue consumption has increased by approaching 4% this year, with growth recorded in all three key pro