After the storm, a period of relative calm: having slumped from some £160 per tonne in the summer to a low of around £95, OCC export prices for the Chinese market have stabilised typically in the £102-£108 range. However, the volumes heading to China are limited by existing import licence quotas, with allowances for 2018 unlikely to be confirmed until a few weeks before the end of the current year, experts believe. Shipping rates have dropped further to $600-700 per 40ft container.
Meanwhile, mixed paper shipments to China have all but dried up following the government’s inclusion of “unsorted waste paper” in its solid waste import ban plans. This ban is continuing to occupy officials at the highest levels: at a meeting on 3 October of the World Trade Organization committee on import licensing, the US, the EU, Australia, Canada and South Korea urged China to provide more information on precisely which types of material will be affected. Canada emphasised that recently announced restrictions were already creating issues for traders.
A leading UK recovered paper industry expert told MRW this week: “We desperately need to know what China’s intentions are.” He also pointed to plunging mixed paper prices – with negative values already reported in the US – and suggested many of the UK’s local authorities are not sufficiently aware of the severity of the emerging situation.
For the moment at least, UK exports of mixed paper to non-Chinese destinations in Asia are fetching around £40 per tonne while some mills in continental Europe have been prepared to pay £70. Also at the time of writing there has yet to be a notable build-up of mixed paper in UK processors’ yards - partly because consumers in, among other countries, India and Turkey have been taking advantage of the lower prices.
Meanwhile, healthy European demand has helped sustain export prices of news & pams at £105-£110 per tonne whereas domestic values are closer to the £100 mark. Among the middle grades, a “fairly flat” multigrade market is witnessing domestic prices of around £160 per tonne and export values at nearer £165.
Fibre exports slip
Having racked up four consecutive months of year-on-year gains to get within 2.6% of the record-breaking levels established in 2016, UK exports of recovered fibre took a turn for the worse in July.
Latest statistics from the Confederation of Paper Industries and HM Revenue & Customs reveal that overseas shipments fell 7.8% to 343,037 tonnes – the lowest monthly total since the 329,966 tonnes of September last year. Across the opening seven months of 2017, UK exports amounted to 2.801 million tonnes to trail the 2.894 million tonnes for the same period last year by 3.2%.
Volumes of mixed paper sent abroad suffered their sixth successive month of year-on-year decline in July although the drop of 7.3% (to 118,344 tonnes) was the only one in single digits. Meanwhile, a four-month bull run for OCC exports – in which monthly outgoings were well ahead of the comparative totals for last year – was unceremoniously halted in July with a 10.1% slump to 174,846 tonnes.
Over the first seven months of 2017, mixed paper exports were 13.6% down on the same period last year at 853,926 tonnes whereas outward deliveries of OCC were 5.8% ahead of the 2016 level at 1.609 million tonnes.
Overseas deliveries of the woodfree grades sank 7.9% to 17,502 tonnes in July after stellar year-on-year gains of around 70% in both May and June; the year-to-date export total shows an increase over January-July 2016 of 8.1% to 134,803 tonnes. As regards the “other grades” of recovered fibre (Class IIb new KLS + Class III newspapers & magazines), customers abroad took delivery of 32,345 tonnes in July for a year-on-year increase of 5.3%, thus ending a three-month run of declines; the cumulative total for the year to July reveals a 22% slump to 203,402 tonnes from 260,908 tonnes in the same period last year.
Regarding total UK recovered fibre collection volumes, a four-month span of year-on-year increases was ended in July by a 3.3% decline to 587,506 tonnes – the smallest tally since November last year. A total of 4.553 million tonnes of recovered fibre was collected in the UK over the opening seven months of 2017, which was 1.5% short of the 4.624 million tonnes of January-July 2016.
On a year-on-year basis, meanwhile, UK mills upped their consumption of recovered fibre in July for the fifth consecutive month – by 2.4% to 253,101 tonnes. This gave a seven-month running total of 1.820 million tonnes, or 1.2% more than the 1.798 million tonnes of January-July 2016.
The published statistics break down collection and usage figures only for the woodfree grades: collection volumes were lower by 5.8% year on year in July at 57,170 tonnes and by 2.5% for the opening seven months of 2017 at 402,226 tonnes; and consumption of these grades dropped 4.4% year on year in July (to 39,868 tonnes) and by exactly the same percentage for the year to date (to 276,334 tonnes).
UK paper and board production recorded its second highest total of the year thus far in July at 326,669 tonnes for a 3% increase over the same month last year. Output across the first seven months of 2017 was 4.1% higher than in January-July 2016 at 2.238 million tonnes.