Demand for recovered paper has shown signs of softening, according to the latest report from the Bureau of International Recycling (BIR).
In the BIR third quarter 2015 report, the Recycling Association’s Simon Ellin said that although the UK had a relatively stable quarter, there was evidence of a softening in demand and prices across most grades for forward selling into Q4.
Ellin said: “Boring is a word you can never use for our industry but, in terms of the brown/bulk grades, the third quarter was relatively uninspiring, with lukewarm Chinese demand balanced out by low generation throughout the summer months.”
Quality of material was an ongoing issue having some impact on foreign trade. Ellin said that some “over-zealous regulation, particularly in Scotland” was making some exporters nervous.
Big fluctuations in price were not expected in Q4, however, with slightly reduced Chinese demand balanced out by increased domestic orders.
Demand for all de-ink graphic grades has continued to be robust, with good European demand keeping domestic prices at sustainable levels, Ellin said, but with “a significant amount of cherry-picking” at a domestic level.
UK mills experienced significant stock shortages of SOW, multigrade and office pack early on in quarter as demand was very robust throughout.
Prices dropped in Q4, however, due to some technical problems and poor Indian demand, although the softening of the market is likely to be temporary.
“The same factors have affected the high-end grades and a period of stability has been experienced,” Ellin said.
BIR paper division president and chairman of J&H Sales International, Ranjit Baxi, said that, globally, although markets had been concerned about the health of China during Q3, they gained confidence by the end of the quarter with the news that the country’s economic growth would still reach a rate of around 7.3% for the year.
He added that the falling price of oil had continued to keep sea freights low, with shipping lines able to maintain rates at competitive levels despite decreasing trade volumes and container shortages at some European ports.