On Monday (July 7) BPB Recycling was one of the last mills to reduce its price to 35, at a level similar to those set by St. Regis, Kappa and Smurfit.
The fall comes after the mills kept prices at around the 55 level for much of the first half of 2003 because of good order books and the weak level of sterling compared to the euro.
The reduction to 35 has surprised some paper merchants who say that a price of 40 would have been fairer. They point to the fact that continental prices have not fallen although a reduction of between 5-15 euros is possible in August. Continental mills are thought to have good stocks of material and may accordingly not be afraid to force through price reductions.
Another factor in the reason for the price falls in the UK is that continental mills are said to have started to dump some finished product here because their order books are weaker and so this is having a knock-on effect on demand for domestic mills. And, domestic mills are getting much less support through the PRN system, with paper PRNs at a low level.
Mixed
Old-KLS has traditionally driven the UK recovered paper sector but this time the fall in old-KLS prices has not prompted sharp cuts in the price of mixed paper and used newspapers remain in steady demand.
Mixed papers is seeing something of a changed outlook. In the past the grade used to attract low prices, at least 10 per tonne below old-KLS, largely because the material was used for board making as an alternative to old-KLS.
But, there remains some good demand in the export market from the Far East and more particularly India which sees mixed paper as a cheaper alternative to old-KLS.
The interest in mixed paper coupled to the weakening in old-KLS prices is seen by some industry experts as encouraging the trend towards a grade which contains cardboard and mixed papers, known to some as “supermixed”.
Comingled
This grade could become of more interest to local authorities if they go down the comingled route as it could also include newspapers and so would not necessitate the sorting of paper.
For merchants a “supermixed” grade will also be more popular when the old-KLS price is low. This is because a low price means that margins for sorting and baling cardboard are reduced and a mixed grade is cheaper to make.
One merchant cautioned however that should the deep sea export market weaken and export prices drop, there is a good chance that old-KLS and mixed material will start to go to landfill rather than being recycled.
PRNs
Packaging waste recovery notes – PRNs – have been of importance to the recovered paper sector over the past years. Now though they are said to be of minimal value with some merchants saying that they are almost worthless “and are not worth the hassle of administration”.
There is a consensus that the low value is doing nothing to help encourage the recycling of board materials and that the government needs to set higher targets for the recycling of packaging materials.
For letsrecycle.com's guide prices, paper prices
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