With this softening of UK prices, slightly better returns on tissue grades are available on the export front, although the difference is said to be almost insignificant once shipping costs and currency fluctuations are taken into account.
Tissue producers point to only moderate year-on-year growth in consumption as the sector heads into the generally quieter summer period. A notable upturn in sales of toilet tissue has been largely offset by static sales of kitchen towel and an approximately 5% drop in consumption of facial tissues.
Turning to the packaging grades, the domestic price of old KLS remains rooted at £45 per tonne while export orders are continuing to be concluded at the £5055 level. But with fairly robust export demand in place for mixed papers at £3540 per tonne, the majority of UK consumers are believed to be paying more than the £25 per tonne reported in the last few months.
UK packaging mills have not experienced the consolidation in demand that many had predicted for this time of year a fact attributed in part to persistent weakness in some major European economies, notably Germany. Demand for some grades has been reasonable but the traditional higher-volume segments have remained lacklustre.
Mixed paper in particular has been leaving these shores at a healthy rate over recent weeks despite complications in key export markets. In India, for example, containers are stacking up at the ports and are proving to be an obstacle to further shipments. Several UK contacts confirmed that they would like to be shipping higher volumes than was proving possible at this time, although it was stressed by one recovered paper expert that orders are getting deferred rather than cancelled.
Containers are also understood to be tied up at ports in China. However, the major import issue in that country concerns its proposal to introduce a new registration system for overseas suppliers of recyclables. Following recent discussions between the Chinese authorities and the leading trade organisations BIR and ISRI, the deadline for registration was extended to September 1 although submission of registration applications was extended to July 20 only. Thus, material on a vessel after September 1 must be accompanied by a registration number.
Chinas General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has confirmed that registration applications, which must be submitted in Chinese or bilingually in Chinese and English, will not be accepted after the July 20 deadline. It has also emerged that applicants facilities will be selected at random by AQSIQ for inspection and that registration will be valid for three years.
It is unclear to what extent lingering uncertainty over the practical detail of the registration scheme has dented recovered paper demand from China as some of its mills are believed to have sufficient stocks for between three and six months of production. If thats the case, they can afford to dip out of the market for a while if they wanted to, it was suggested this week.
Indian and Far Eastern buyers are showing keen interest in UK de-inking grades but, once again, shipping problems and currency movements have had a dampening effect on the market. At £4850 per tonne, the export price of news and pams is just ahead of the domestic level, and the same appears to hold true for overissue news. Some Continental producers have dropped their prices by the equivalent of a couple of pounds per to