Paper prices falter but demand firms for some grades

There had been strong expectations among mills and merchants that the first quarter of the year would see a considerable slowdown in activity after a busy 1999 ahead of the Millennium celebrations. Instead the market had remained far busier than had been anticipated with prices generally rising during 2000.

However, within the UK over the past four weeks there have been some slight reductions in prices with one mill dropping its price for mixed grades although UK prices are still slightly higher than those in the export market.

On the card front – old KLS or OCC – demand has been good although price reductions have been made by several mills including BPB. The latter uses much of the board it buys in-house for plasterboard liner and this market is said to be very competitive. In contrast, St Regis – a major buyer of board and with a large amount coming through its own business Severnside – has not reduced prices so far.

Some observers say that there is a likelihood that with the pound still relatively strong compared to other European currencies including the Euro, the UK will see more import of finished corrugated and board products which may prompt the mills to cut the price paid for old KLS.

In the used newspaper and magazine market there has been some talk of price cuts but so far prices are unchanged. There is also talk of strong demand at home and also abroad with some de-inking mills on the continent short of material. Accordingly, price cuts are not expected in the short-term.

The tissue sector has seen considerable controversy with merchants angry at a 5 reduction for office waste. Usually the market is expected to run through unchanged at what should be a good time of the year for the tissue mills. One expert commented that with prices firming for finished product in the tissue sector, mills are keen to strengthen their margins.

The big issue now is how strong export demand will be and there were reports this week of renewed interest from the Far East in mid-grade material.

At the Bureau of International Recycling Convention in Dusseldorf the recovered paper division was told that while there was something of a downturn at present, mid-grades were in demand in the Far East and the demand for deinking material (used newspapers and magazines) was strong in Europe. Overall speakers pointed to a continuing strong trade in 2001 with some suggesting that the market would strengthen again in February.
– the letsrecycle.com price guide for recovered paper is unchanged for November