BIR paper president highlights market ‘bright spots’

In its quarterly report, the BIR’s paper division president, Ranjit Baxhi of London-based J&H Sales International, says that there was confidence in the market.

He writes: “News of globally weakening demand and downward GDP revisions for leading world economies dominated the third quarter… However, markets gained confidence by the end of the quarter with the news that China’s economic growth was within the tolerance range and that it will achieve a growth rate of around 7.3% for the year.”

Mr Baxhi also referred to other “bright spots” amid the economic gloom. “The falling price of oil continued to help keep sea freights low, with shipping lines able to maintain rates at competitive levels over the quarter despite decreasing trade volumes and container shortages at some European ports.”

Sterling

UK market operators have told letsrecycle.com this week that while Chinese exporters would like to see prices reduced in September, they are currently firm with a strong sterling and “good” shipping rates helping. This means that summer prices paid for used cardboard are so far being maintained and there is also good demand for mixed papers. However, prices for some mid-grades, such as multigrade are weaker.

Quality

The BIR report also contains comments from individual countries with the UK perspective coming from Simon Ellin, chief executive of the Recycling Association.

Mr Ellin noted that “Quality is still top of the agenda in the UK with some over-zealous regulation – particularly in Scotland – resulting in significant nervousness among exporters”.

And, he said that “big fluctuations” in prices are not expected into the fourth quarter: “slightly reduced Chinese demand may be balanced out by increased domestic orders as the refitted Smurfit Kappa mill at Snodland ramps up production.

“Meanwhile, demand for all deink graphic grades has continued to be robust, with good European demand keeping domestic prices at sustainable levels such that the demise of the Aylesford mill and the capacity reduction at UPM are now a distant memory. Again, quality is key and there is still a significant amount of cherry-picking at a domestic level.”

Germany

The BIR report also sees Germany highlighted as an important market within the EU for recovered paper.

Germany’s BIR paper division representative, Reinhold Schmidt of Recycling Karla Schmidt, noted that Germany is Europe’s largest recovered paper consumer.

He said: “The domestic recovered paper disposal industry has been importing for years – and increasingly from other European countries such as the UK, the Czech Republic, the Netherlands and Austria – in order to satisfy German paper industry requirements. Demand from the Far East was considerably lower in August, which led not only to stability but also to some relief in the German market.”

Mr Schmidt continued: “With the summer holidays having ended, September saw an increase in recovered paper availability and recyclers were able to satisfy paper industry demand for bulk grades with relative ease… Overall, the market has been relatively balanced and the cutting of some price peaks resulted in certain countries such as France, Spain and the UK having to adapt to the situation. Since mid-September, there have been reports of increased quality controls being carried out by consumers.”