Recovered paper prices have dropped across the board as European mills ease production.
According to MRW/WRAP prices, news & pams has dropped by £15 a tonne since the end of August when prices peaked at a range of £150 to £129 per tonne. The price range for old corrugated cardboard has dropped and widened dramatically since mid-August from a high range of £135-£128 per tonne, down to £130-£105 per tonne.
UPM head of recovered paper sourcing Craig Robinson said: “There is downward pressure on [news & pams] prices and the main reason I can see is because of the situation with the mills in Europe.
“They have high paper stocks and mill output has reduced for various reasons, in addition they tend to stop production over holiday periods unlike UK mills. This has meant prices have lowered in September and October and I expect them to fall further into November and December.”
Robinson said that paper stocks over the summer period were higher than usual, while paper prices have been very high, so we are now seeing a price correction.
“I don’t know what effect China is having, if any. The market there is relatively stable, although the orders seem to be smaller.”
Both Chinese and European markets are pushing old corrugated cardboard (OCC) prices downwards at a rapid pace.
Mark Lyndon Paper Enterprises UK managing director Paul Briggs said: “The OCC price is falling fast. There are very few orders into China because the Chinese are waiting for a fall in price before they will order, also the linerboard price is so low they need a lower price.
“Chinese reprocesses saw growth in their domestic market but it seems that too many machines have come online and killed the linerboard price. They were all chasing the same growth.”
Briggs told MRW that June to August is traditionally China’s busy buying period so it can get boxes ready for western Christmas but the orders were not as high as usual. He claims, this may be because retailers are not expecting a bumper Christmas this year and so have not ordered as many products.
“It seems that Europe and the UK has dropped prices on its linerboard products, also due to weak order books,” he adds, “so UK exporters that have sold material to them consistently for the past 12 months are looking to sell on elsewhere to get a better price.
“Currently, it’s all about the price of the end product as opposed to whether the demand is there.
“It wouldn’t surprise me if the price of OCC dropped by £20 per tonne over the next week. It seems that the stars are lined up for another crash if we’re not careful.”