In December, market insiders reported a mixed bag of stable, higher and lower prices for sorted mixed papers and board (1.02), corrugated paper and board (1.04) and the deinking grade (1.11).
December was characterized as a month of weak demand for the brown recovered paper (RCP) grades. Extensive holiday season downtime was taken in Germany, starting already before the festival season and lasting until January.
Brown CCM (corrugated case materials) prices continued to be under downward pressure in December but not as heavily as in the previous months while newsprint pricing was rather stable.
Old corrugated containers (OCC) export demand and prices from Europe to the Far East destinations crept somewhat higher in December.
Shipping challenges caused by Red Sea dispute
However, recovered paper trade between Europe and Asia has been distracted by the recent violent dispute in the Red Sea by the Houthis, a Yemeni rebel group, that has been causing major consequences to the marine traffic.
To avoid the risks, many shipping lines have been rerouting their traffic via the Suez Canal to a longer and costlier southern shipping route passing the Cape of Good Hope, while some of them have been halting their shipments temporarily.
When shipping recovered paper from Europe to Southeast Asia via the southern route, it means a 10-day longer sailing time. Some 30% of the world’s container shipments travel through the Red Sea.
Declining RCP prices
After showing an increase of Euro 3.43/tonne in November to Euro 95.46/tonne, the PIX Index for 1.02 came in at Euro 93.01/tonne in December, which was Euro 2.45/tonne lower month-on-month.
The value of PIX 1.04 increased by Euro 4.66/tonne in November to Euro 112.96/tonne, but ended up showing a drop of Euro 1.51/tonne in December, landing at Euro 111.45/tonne.
The PIX Index for 1.11 inched up by just quite marginal 48 cents in November to Euro 131.05/tonne, and declined by Euro 1.41 to Euro 129.64/tonne in December.
