Prices in both the domestic and export markets have seen falls of 30% or more since the beginning of October. Most in the recovered paper sector have viewed this as a long-awaited market correction because prices had risen to high levels despite the ongoing pressures on the world economy.
Crucially, orders have mainly continued to be placed although some merchants found it hard to sell material in October and there are still problems with some grades, especially officer and printer’s material.
However, most of those in the recovered paper sector contacted by letsrecycle.com were of the view that the market pressures, while difficult,have not been as severe as in October 2008.
Some merchants have warned that they have faced losses from the sharp falls in prices and argued that their both customers and suppliers of used material need to be aware of this.
Stability?
Now, attention is focusing on whether or not stability has been reached and the overall view seems to be “not quite yet”. It is expected that there will be a reduction again in the price for used cardboard in December and mid-gradesmay also struggle for a few months more before there is any clear sign of the way forward.
A December reduction in used cardboard prices is expected as some UK and European mills will take down time to reduce production and maintain machines. Alongside this, Chinese demand is expected to slow ahead of an early Chinese New Year in January and the annual delays in approval of licences by the Chinese authorities for some of the middle-sized Chinese mills.
China
Chinese mill operators are said to bekeen to recover from some of the higher prices paid earlier in the year for material. One exporter said: Chinese buyers have driven the market for a long time on the strength of their economy. The government there is trying to rein things back and we are also past the peak season for demand.
Another expert noted that the winter market situationmay depend partly on the US winter and the extent that recovered material takes the place of pulp in mills there. And, the situation in Europe is a complicating factor.
The consensus now seems to be that stability is unlikely to be reached until early in the New Year and will also be influenced by export orders to India of mid-grade material. Beyond that, there remains optimisim that the global economy will have to start to pick up and the demand for waste or recovered paper as a secondary raw material will rebound.
Subscribe for free