Recovered paper import prices drop across the board in SEA and Taiwan

Limited availability of RCP imports has not stopped the price drops as regional demand weakens

While the availability of recovered paper (RCP) imports in Southeast Asia (SEA) and Taiwan continued to decline, the regional demand for them has apparently weakened further over the past two weeks.

Suppliers reported that RCP tonnages available for exports from the United States, Europe, and Japan have remained restricted due to their low collections, in line with consumers there cutting back on spending.

Sources also pointed to an increase of €30 ($33) per tonne for old corrugated containers (OCC) prices in Germany, saying levels for the brown grade are higher than those of its exports to SEA, resulting in sellers holding back from giving offers to customers in the region.

With limited availability, suppliers have thus kept offer prices for OCC imports at levels in SEA higher than what regional customers had expected, contacts pointed out.

US double-sorted OCC (DS OCC 12) has been offered at $165-175 per tonne in Taiwan and SEA, except Indonesia. Indonesia requires pre-shipment inspections to be carried out for inbound RCP cargoes and the US premium brown grade has been priced at $180-185 per tonne in sellers’ initial offers to clients.

Offer prices for European OCC 95/5 are $145-150 per tonne in most of the region and $155-165 per tonne in Indonesia. Japanese OCC is priced at $160-165 per tonne in initial offers.

Buyers have, however, brushed most of such offers aside, citing sluggish OCC demand on the back of their own bloated OCC inventories, along with stacks of finished product stocks at their warehouses.

OCC prices down

Mills in SEA and Taiwan have been taking downtime to tackle weak packaging demand, leading to them slashing OCC volumes substantially.

One group of major buyers, China-affiliated producers operating large plants in Vietnam, Thailand, Malaysia and Indonesia to produce packaging materials and recycled pulp, have also cut OCC purchases drastically because sales of their output have stalled.

As a result, buyers have managed to haggle down prices for OCC imports.

Regional OCC slumps

Sources pointed to a decline in local OCC prices as an indicator of the packaging downturn in SEA. The local OCC price decline has motivated regional mills to step up purchasing locally while reducing OCC imports.

Another weakening RCP signal is falling prices for the import of pulp substitutes, such as sorted office paper (SOP), and deinking grades, such as old magazines (OMG). A major customer said that tumbling market pulp prices in Asia and elsewhere in the world has driven down prices for those grades proportionally, despite their limited availability.

“SOP imports are going for $240-260 per tonne and OMG imports fetch just $140-160 per tonne in SEA. We have not seen them at such low prices for a long time,” the contact said.

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