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Paper sector concern about Asian linerboard coming to Europe

According to paper sector experts, the European linerboard market could soon see renewed interest from Asian linerboard producers, following extremely high market prices in Europe.

Linerboard, which is used to make cardboard boxes, is currently trading at around €500 (£440) per tonne. An industry insider claimed that because of the current high purchase price of linerboard in Europe, Asian linerboard producers could start selling their linerboard products into the European market. If this were to happen, it would push the price of European linerboard down, as the price of Asian linerboard would be more attractive to buyers. This would in turn significantly knock down the price of recovered paper, potentially by as much as £50 per tonne.

According to the insider, some major Asian mills are on the cusp of exporting linerboard products to Europe at competitive prices. He said: “They can just about get it to Europe and pay the likes of VAT and import tax and still make a little profit, but if European linerboard prices keep rising, they would make a very good profit. These are all ‘ifs’ but very real ones.”

ACN Europe managing director Niels van Binsbergen agreed there was potential for this to happen: “It could happen but the problem with China is that it has a 17% export tax on linerboard in a bid to reduce the amount of exports of it [linerboard] out of the country, [in order] to reduce the country’s carbon emissions [which may hinder this move into Europe].

“But with the European linerboard price going up and up, at some stage it will be interesting to see if Asia decides to step into that market. I don’t think Europe will be the first target to sell to. They [Asian producers] will try and sell to Europe’s export markets instead, such as the Middle-East and Africa.

There is not yet over-production of linerboard in China but there are some more production facilities coming online soon, which could change that.”

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