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Markets slow but steady

There was barely any change in UK mill consumption in three out of the four classes of recovered paper in September, according to latest statistics. However, there are no prizes for guessing that the exception was Class III newspapers and magazines, consumption of which soared 29% from 96,139 tonnes in September 2003 to 123,992 tonnes in the same month this year. In the first three-quarters of 2004, consumption of newspapers and magazines leapt 23.5% from 897,875 tonnes to 1,109,000 tonnes.

Rolling together all of the classes of recovered paper, total consumption in the ninth month of this year was 390,093 tonnes equivalent to a 7.8% improvement over the 361,882 tonnes recorded a year earlier. Consumption of Class I mixed grades slipped 1.1% to 27,164 tonnes while the total for Class II corrugated and kraft edged a mere 59 tonnes lower to 177,498 tonnes, thus recording no change in percentage terms. Class IV high grades inched just 1.2% higher to 61,439 tonnes. In the first nine months of 2004 as a whole, these same three classes registered significant consumption declines: the mixed grades total fell by 11.4% to 226,925 tonnes; corrugated and kraft was 6.6% lower at 1,574,000 tonnes; while consumption of high grades was 4.5% shy of last years JanuarySeptember total at 537,278 tonnes.

Total consumption in the first nine months of 2004 was 1.3% above the 3,401,000 tonnes reported last year at 3,447,000 tonnes.

Coincidentally, intake at the mills was also 7.8% higher in September this year at 408,288 tonnes. Newspapers and magazines again led the way with an 11.5% increase to 132,381 tonnes, although significant gains were also made by high grades and by corrugated and kraft. Intake of the former jumped 7.6% to 65,920 tonnes while the latter experienced a 7.2% increase to 184,030 tonnes. The only class to move in the opposite direction was mixed grades, intake of which slipped 3.5% in September this year to 25,957 tonnes.

The UK intake total for the first nine months of this year was 3,473,000 tonnes some 2.6% ahead of the 3,384,000 tonnes recorded for the corresponding period of 2003. Once again, newspapers and magazines provided the exception by leaping 18.6% to 1,111,000 tonnes. As for the other three classes, mixed grades slid 8.5% to 226,588 tonnes, corrugated and kraft dipped 3.8% to 1,578,000 tonnes, and the high grades total was just 0.6% lower at 557,555 tonnes.

A thumping 37.1% drop in the mixed grades inventory was the most eye-catching stock-related development. This heavy fall followed a 28.9% jump in stocks during August, with the result that supply tumbled from 1.2 weeks at the end of the eighth month to a mere 0.6 weeks by the close of September. The newspapers and magazines inventory was trimmed by 2.8% to 47,329 tonnes by the end of September, thereby pushing down supply from 1.7 to 1.6 weeks.

Elsewhere, inventories actually grew during the ninth month. Stocks of high grades increased by 9.1% to 26,296 tonnes after having dropped 14% in the previous month, although supply at the prevailing rate of usage remained unchanged at 1.8 weeks. Meanwhile, the 5.9% jump in corrugated and kraft stocks to 59,135 tonnes was insufficient to prevent supply from dipping to 1.4 weeks after having ended August this year on 1.5 weeks.

At the end of September, UK stocks totalled 136,722 tonnes a slim 1.3% higher than the end-August total of 134,946 tonnes. By comparison, the total inventory at the close of September last year was down at 98,299 tonnes. All classes of recovered paper were subject to stock increases when comparing end-September 2004 totals with those recorded 12 months earlier: mixed grades and high grades were both 15.2% higher; the corrugated and kraft inventory grew by 53.5% over the 12-month period; and stocks of newspapers and magazines advanced by 41.2%. Average stock coverage at the end of September 2003 was 1.2 weeks against 1.5 weeks a year later.

A slight increase in UK paper and board production was posted both during September this

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