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Firm export prices confirmed for mixed paper grades

As many recovered paper industry experts were predicting several weeks ago, the pressure applied by higher export prices has led to an improvement in domestic middle grade returns. Two of the UKs leading tissue-makers Kimberly-Clark and SCA increased their purchasing prices by £5£7 per tonne towards the end of October, and others were strongly expected to follow suit by very early November.

The upturn in domestic prices is seen as a response to low stock levels at the end of the summer period, as well as firm overseas demand for the likes of multigrade, coloured best pams, coloured heavy letter and the light letters. Demand from India has driven the UK market to a large extent, observed a leading industry figure. The Far East has also helped to stimulate demand, and there are even whispers of demand from China for the woodfree grades. No further problems were reported this week in connection with the AQSIQ registration scheme introduced by China to cover imports of recyclables.

The complexities of shipping secondary raw materials to both India and China were scheduled to come under international scrutiny at the latest BIR convention, which took place in London at the end of last month. Indeed, the world recycling body organised a workshop specifically to examine the problems faced by exporters to India and the reasons why many shipping lines were refusing to accept their products.



India

Several UK recovered paper specialists reported that the problems in India had shown signs of easing over recent weeks, whereas many others suggested conditions were still very tight. A lot of exporters are still not getting as many containers as they would like, MRW was informed. This situation is proving cause for concern, especially given the growing importance of the Indian market. For example, the country is not only buying middle grades in sizeable quantities, but also paying up to £10 per tonne more than the UK market.

Meanwhile, strong demand has kept KLS prices for India and the Far East significantly above the levels achievable in the UK. Between £52 and £55 per tonne is reportedly being paid for these exports compared with £45 for the bulk of domestic business. Firm export prices were also confirmed this week for mixed paper: while the UK level has remained within the £25£30 per tonne band, the lower end of the export price range is understood to have risen from £35 to nearer £37, per tonne while the top end is around the £40 mark. One large processor commented: We are being offered more material by merchants, as we would expect in the run-up to Christmas. Its certainly not because of a lack of demand because there are still a lot of orders out there.

Turning to the de-inking grades, upward movement has also been reported for overissue news another grade popular among buyers in India and China, although Indonesia is regarded as the principal buyer in the deep-sea market (interestingly, Indonesia accounted for 18% of all UK recovered paper exports last year, equivalent to well over 330,000 tonnes and only just behind the volume imported by this countrys number-one export market, China). The export price of overissue news has risen of late by around £5 per tonne to between £55 and £60, whereas a recent increase in overseas demand for news and pams has had a less dramatic impact on exporters returns. Compared with a UK delivered price of £45 per tonne, export prices are said to have hardened towards the top end and now generally fall within a range of £48 to £50 per tonne.

No significant price changes were reported this week among the higher grades of recovered paper, with demand described as reasonable on both the home and export front. It was suggested this week that the middle grade price increases could prompt a slight upward movement in white letter. Prices certainly wont be coming down, MRW was assured.

From the producers perspective, the increase in tissue grade prices has come at a time when overall market growth has virtually s

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