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

Feature: hopes are pinned on March for price rise

If, as historic price trends would suggest, 2005 is to be characterised by sharp spikes in UK recovered paper prices, then this supposedly golden year has got off to a decidedly lacklustre start.

However, optimists within the trade dismiss January and February as traditionally slow months, and are pinning their hopes on March as the starting point for positive price momentum.

Several factors would tend to support their case: Chinese New Year celebrations have now ended and buyers in South East Asia have returned to work; cold weather has adversely affected recovered paper collections in the USA and China; and pulp prices have been hardening for some time.

A review of the price patterns traced by OCC and mixed papers over the last three decades offers a compelling, numerical argument in support of a rapid price surge in 2005, with both grades starting a climb to dizzying heights in 1975, 1985 and 1995 - all years ending in a number five. The first two months of this year, however, have brought virtually no forward progress in domestic recovered paper prices. Most UK mills are continuing to pay £40 per tonne for their old KLS although some consumers are understood to have returned to the £45 level which had been current for most of 2004. By contrast, export prices have registered a slight increase and overseas buyers now appear prepared to pay up to and around £60 per tonne for the same material.

Having observed that KLS was being shipped out of the UK at "a phenomenal rate", a domestic recovered paper expert suggested UK producers were playing a dangerous game in allowing the price differential to drift out to close on £20 per tonne. At the same time, he acknowledged that most domestic mills appeared to have adequate stocks at present.

Asian demand for both KLS and mixed papers was described this week as anything between "very good" and "insatiable". Several contacts reported very attractive offers for spot tonnages at price levels pitched slightly above those paid for regular orders. The current export price for mixed papers is put at around £38 per tonne, well ahead of the £25 per tonne available on the home market.

China remains a leading destination for UK shipments of both KLS and mixed papers and recently-ended Chinese New Year holidays had barely any impact on flows of material to the country. On a less positive note, however, there is still concern among UK exporters about CCIC's intolerance to the presence of even small amounts of plastic in bales of mixed paper. If they continue to pursue this harsh rejection regime, said one expert, "there is a danger they will run out of suppliers or force prices up".

According to a prominent recovered paper industry figure, the Far East market for mixed papers is very healthy at present. However, he expected the focus of demand to shift towards OCC and news and pams "as separate commodities" over the course of the next few years. Thus, new local authority schemes in the UK should be geared towards such segregation, he believed.

The market for de-inking grades appears to have changed very little over the last month. Material is moving sufficiently freely out of merchant processors' yards such that, according to one wag, "there is plenty of space for a game of footie". Intake, meanwhile, was generally described this week as "patchy". The domestic news and pams price remains £2-3 per tonne below wha

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.