The price of OCC has gradually dropped over the past couple of weeks, following a peak of £140 per tonne, which hit just before the two bank holiday weekends.
According to industry experts the price of OCC has fallen by £5 per tonne each week for the past three weeks.
Mark Lyndon Paper Enterprises (UK) managing director Paul Briggs believes it is the UK and European mills that have made the market behave in this way. He told MRW: “UK and European mills were buying very heavily on the lead up to the bank holidays because having them so close together was a bit frightening as they had to ensure they had enough material to get them through the holidays and keep their mills going. They were willing to pay £140 per tonne. Chinese paper mills cannot afford to pay that money, so they have been buying from the US over the past few weeks.
“Once the mills had stocked up for the critical period, demand came off and so the price began to drop. It’s now trading at around £126 per tonne.”
Another recovered paper exporter said he had seen prices drop down to £130 per tonne. He said: “I think it has probably dropped a bit because a couple of the bigger Chinese mill groups are not buying much in Europe at the moment.
“The price is still very high though, as when you compare it to this time last year, we were getting around £60 per tonne. I think we will see prices even out to around £125 per tonne over the next couple of weeks.”
One industry expert commented: “While there may have been a peak in index paper prices in the run up to Easter, there will have been few, if any, movements of fibre in the domestic market at these prices. Such prices were mainly enjoyed by the export market. Since the bank holidays, the index price for the export markets has begun to shrink, a trend that should not reverse over coming months. There has also been a drop off in domestic fibre prices but we expect this to hold firm.”