The recovered paper sector has seen a positive start to 2014 with a slight upturn in prices for some waste paper grades although there has been a squeeze on prices for used newspapers.
The relatively positive picture has also been reflected in the latest international round-up produced by the Brussels-based Bureau of International Recyclings (BIR) paper division with its president noting improvements in the world economy.
In the UK the sector has seen good demand over the last six weeks from the export market despite the looming Chinese New Year which is often seen as putting some volatility into the marketplace. One merchant said: January is something of a pinchpoint. If prices had stayed the same, this would have almost been reflecting a fall in the market.
General sentiment remains that no large spikes are expected in prices in the next few months. However, questions remain over the used newsprint sector with newspaper readership still declining and a weaker export demand. Local authority contracts are still being agreed at higher than spot prices, although these are often for lower tonnages year-on-year.
Recovery
Writing in the BIRs report for the last three months of 2013, the paper divisions president Ranjit Baxi of the UK noted a recovering world economy.
He stated: News that the global economy is expected to continue expanding at a moderate pace over the coming two years has been welcomed given the post-2008 financial meltdown and subsequent global slowdown followed by recession. The world economy grew by 2.7% last year and is projected to record increases of 3.6% in 2014 and 3.9% in 2015.
China, the engine for fibre consumption, has also begun to pick up. Other developed and emerging economies posted similar trends during the fourth quarter of last year. However, currency volatility.
was a major challenge during the same period, with export pricing made difficult by the increased fluctuations in the exchange rates between the US dollar and both the Euro and sterling. Freight rates tended to remain reasonably stable during the quarter.
Demand
Simon Ellin, chief executive of the Recycling Association and who is also the UKs representative at BIR reported that the final quarter of 2013 brought some welcome signs of recovery in the processing sector. Most processing and brokering members of the Recycling Association reported increased confidence and volumes, supported by good demand and generally stable prices.
Germanys Reinhold Schmidt of Recycling Karla Schmidt highlighted the growing demand for recovered paper in Eastern Europe.
Mr Scmidt said: Polish processors increased demand for paper for recycling over recent weeks has been remarkable. They have been grabbing volumes from the Czech Republic, Hungary, the new federal states in the east and even from Austria. As a result, mills in other southeast European states have extended their procurement radius. Until now, this has led to only isolated examples of special prices. With regard to exports of surplus material to China, the moderate outflow has continued.
The French representative to BIR, Jean-Luc Petithuguenin, of PAPREC gave an upbeat report. And, he noted that manufacturing mills had managed to get prices through to their customers. He also expressed disappointment that End of Waste status had not been secured for recovered paper.
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