Paper prices from 23 March to 22 April remained largely flat as Southeast Asian mills have absorbed much of the impact of the Iran war.
Overall, there seems to have been higher demand in late March and early April driven by the wider geopolitical situation, but this seems to be calming down and the sector’s appetite for risk is understandably low.
It was predicted that the fuel surcharges being applied by major shipping lines would cause prices to plummet, with freight companies increasing their charges by around $100 to $200 per container.
However, due to low stock after several months of limited purchasing, mills in the Southeast have largely agreed to carry the burden of the extra costs. Some in the sector predicted that this situation is unlikely to continue, and the price shock may soon be felt – especially if global fuel surcharges become more constrained around June and August as predicted.
The surprising absorption of costs has been accompanied by relatively low generation across the board, meaning that prices have largely remained extremely flat this month.
This is with the exception of OCC 1.05 grade which saw minor increases of £5 on the top end and a £2 increase on the bottom end.
OCC 1.04 grade for export saw a small uptick of £2 on the bottom end only.
Staying with export, multigrade saw an increase of £2.50 on the midpoint which can be partly attributed towards demand from Europe.
The price of domestic news and pams seem to have stabilised after the recorded decreases in March.
Sorted Office Waste (SOW) continues to be under pressure, with the demand from Essity’s Prudhoe facility expected to be low.
Looking ahead
Some in the sector warned that, while on the surface the flat prices may be a relief for some, this time of year prices tend to start increasing which is currently looking unlikely.
Europe is also set for a quieter month due to several bank holidays which may reduce generation locally and drive higher demand from the mills for UK recovered fibre.
Given ongoing geopolitical instability, it remains to be seen where prices will go in the coming months – especially once the picture becomes clearer around the containers which are currently stuck in transit in the Middle East.
View our more detailed paper price index here.
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