Paper exporters are uncertain of what direction paper prices will move over the next week, despite an expected boost in buying following the end of the Chinese New Year.
There was only a slight ease in prices when the holiday happened, with some traders seeing a rise of £1-£2 on 10 February when the festivities officially ended.
“A lot of the mills stayed closed until that Monday but where prices will go is a bit of a mystery,” according to Mark Lyndon commercial director Paul Briggs. “The best linerboard material in the world comes from the US. Currently, US OCC is trading at just $15 above the UK price. Therefore, Chinese buyers may think the extra few dollars to buy US material over UK material is worth it because of the quality.”
Traders expect to see healthy demand from China over the next week but this may not be for UK material. However, there is the risk that if China does demand a lot from the US, this will push the US material price up and they will return to buy from the UK.
However, International Recycling business development manager Scott George was confident the UK would see an increase in demand for OCC over the next week as some of the bigger Chinese suppliers have held off from buying. He said: “I think there will be a bit of movement upwards. The current price is high but it will probably rise even further. Freight prices are not too expensive and although the dollar exchange to the pound is a bit high, it shouldn’t affect it too much.”