The industry insights were laid out in the BIR’s recently published quarterly report, featuring updates from Spain, France, Germany, Scandinavia and Turkey as well as North America.
‘Main feature’
The BIR paper division’s president Francisco Donoso of the Spanish DOLAF Servicios Verdes S.L. highlighted that “the main feature of the market has been the lack of demand across all parts of the world, principally because of low consumption of finished products and therefore weakened demand for packaging material”.
He attributed this to a combination of factors including the financial crisis, high inflation rates as well as the Ukraine conflict, which was echoed by several others when reflecting on the market conditions. On the other hand, Mr Donoso continued that “fortunately, freight rates to Asia have dropped significantly such that the market, although weak, has retained some life”.
Mr Donoso then explained: “In Europe, OCC and white grade prices have dropped around 20€ per tonne since May whereas the deinking grades have remained relatively stable, albeit at low levels. In the USA, domestic OCC prices climbed slightly in some regions at the beginning of July, but all other grades continued to fall.” He added that this trend “seems to be changing currently in Asia, with hikes of up to US$ 15 per tonne in India and of US$ 5-10 in other countries”.
European prices
In terms of falling prices in Europe, Jean-Luc Petithuguenin of France-based Paprec seconded Mr Donoso. He said that while the beginning of the second half of 2023 saw prices increase in Europe, they then “dropped twice”. Mr Petithuguenin also noted that “export market enabled sales to be spread between Europe and Asia, leading to low stock levels in warehouses”.
He then explained that “no improvement is anticipated this summer”, meaning that “demand is expected to remain average, with no German market, and inventories are set to rise again in August given the announced plant closures”.
Indeed, Germany’s Reinhold Schmidt confirmed that “some production facilities went on short-time working for the first time, following the earlier lead set by others”. Similarly, Martin Leander from Sweden-based Swena Recycling noted the high stock levels that can be seen at “many of those mills in Europe implementing production stoppages”. Mr Leander added that despite an increase in price for OCC in an otherwise “unstable” market, “predicting the direction of the market during the third quarter is rather challenging owing to the economic landscape of rising interest rates and inflation effects”.
Turkey
Describing the situation in Turkey, Ekrem Demircioglu said that the downturn in demand that the country has been experiencing since the second quarter of last year was “again evident in the second quarter of 2023 and resulted in average production capacity utilization of only around 70%”.
Earlier in the year, the earthquakes in February led to a “complete halt in operations at Kipas Paper Mill and Kahraman Paper Mill which persisted throughout the second quarter”. However, Kipas Paper Mill was able to resume production in July, with “some optimism” that the latter will be able to do so in the third quarter. Mr Demircioglu also said that paper mills initiated “a slight increase” in their sales prices during the third quarter in a “strategic move” hoped to provide some financial relief for the sector.
North America
In the US, recovered paper generation “remains slow on virtually all markets across the country”, bringing prices for recovered fibre up domestically, reflected Myles Cohen on behalf of Switzerland’s Marc Ehrlich. He also outlined that recovered paper sellers are having no problem getting orders from both domestic and export buyers, “particularly for the major bulk grades of OCC and mixed paper”, noting “optimism for the future”.
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