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The recovered paper market showed some price movement again in October. As of the previous month, market insiders reported increases of around Euro 5-10/tonne for sorted mixed papers and board (1.02) and corrugated paper and board (1.04).
The development was once again first and foremost ascribed to export demand and European buyers’ efforts to keep the gap between domestic and export prices at bay. Demand in Europe, although some contacts reported slightly brighter spots in some instances here and there, was not strong enough for price increases.
“Market-related downtime was still the order of the day, and weak demand for their products and pressure on prices were not exactly a good reason for paper manufacturers to pay much more for recovered paper. Still, it’s probably a positive sign that they still try to keep raw material stocks at decent levels,” a market insider noted.
Prices for sorted graphic paper for deinking (1.11) saw only minor increases, with contacts quoting stable or slightly lower levels as well. However, some of them said they expected more pronounced changes sooner or later.
“The brown grades are selling well and prices are rising, there isn’t much incentive to sort. In the end, either supply of deinking material will get so low that buyers have to pay more if they need volumes, or demand for the brown grades withers and prices for both mixed paper and deinking material will go along,” one of them explained.
After all, the PIX Index for 1.02 came in at Euro 92.03/tonne in October, which was Euro 4.90/tonne higher than the previous month, while the figure for PIX Index for 1.04 rose by Euro 6.47/tonne month on month to Euro 108.30/tonne. The PIX Index for 1.11 inched up from Euro 128.45/tonne in September to Euro 130.57/tonne in October.
“There is a huge lack of demand in all paper markets. Many mills are saying that prices for finished goods are making it financially difficult for them to pay higher prices for recovered paper, and some would rather take downtime than accept higher input costs against falling finished goods prices and increasing losses,” a market insider said.
“We were expecting to see an upturn in the paper market ahead of the Christmas season, but that hasn’t happened so far. Now we need to rely on exports staying strong and domestic buyers’ willingness to follow the development in export pricing, at least to some extent,” another one chimed in.
However, the export business recently seems to have been running less smoothly than in previous months, with more erratic buying behaviour and sometimes surprising price developments, market observers reported.
“It has been a bumpy ride,” a contact commented. According to him, buyers from India said in early October that domestic prices there had gone down due to rising collection volumes after the end of the monsoon season. While this had little impact on volumes and prices at first, demand from India then weakened and buyers offered prices that were $5-15/tonne lower than the previous week. Buyers from southeast Asia reportedly followed the development and applied reductions of around $5/tonne.
“The market continues to be in a very delicate situation, and lower export prices could easily result in decreases on the domestic market. That hasn’t happened so far, but things are rather shaky right now,” a contact said.