But, the mills are now able to be a little more optimistic that a slight upturn on the continent will mean that UK prices will not have to be reduced for recovered paper. Falling prices on the continent over the summer were set against a background of weak home demand coupled with low arisings from printers and other sources of waste paper. Now with gathering strength in some continental markets, notably Holland, there is optimism within the mills that continental recovered paper prices will start to harden. This in turn will help shore up UK prices paid for recovered material.
In recent months the price of old KLS (used cardboard or OCC as it is also known) has tumbled on the Continent from 135 euros earlier this year to 75 euros at the end of September with a possible fall to 65 at the end of October.
It now seems that an upturn in demand for a variety of grades from the Far East and India is helping to stem the price falls. UK merchants have welcomed the return of the Asian buyers into the UK market and report that while the deep sea market is static in terms of price, the demand is there.
Traditional upturn
Merchants are well placed to take advantage of any increase in demand because of the traditional upturn in arisings at this time of year ahead of the traditional Christmas retail boom. Arisings from all quarters – printers through to board converters – have been slow for much of this year. But, as one merchant told letsrecycle.com “Volumes of OCC coming into our yards have increased dramatically in the last three to four weeks and we are able to meet orders and have stocks.”
Merchants consider that UK paper mills should not seek to reduce their buying price for old KLS because the mills are able to generate a packaging waste recovery note of 30 for every tonne they sell. Reports that one of the largest UK board mills was set to cut its price by 3 a tonne have been discounted and may signal a change of heart by the mill in light of the pick up in Holland.
Newprint sector
For local authorities newsprint remains an important grade. UK mills are keen to attract material. Aylesford Newsprint continues its drive to secure contracted material for which it is willing to pay more than current spot market prices. Shotton Newsprint, which is building a new deinking line, is seeking to attract more material, especially from the Manchester area where its campaign to encourage local authorities to collect the material is having mixed results.
Cheshire Recycling is also actively sourcing material both for its home mill and to serve the export market – it is part of the giant Abitibi group. Stora Enso in Belgium is reported generally to be buying strongly although at times it is not buying for a week at a time.
Merchants report good demand for news and pams from the export market, especially India, with buyers looking for mixed, news and pams and office waste. One merchant remarked: “We don’t need to see high volume orders for office grade material for there to be a sudden increase in demand throughout the market.”
Other points of current interest are that quality issues remain important with exports to the Far East with China demanding more inspections of material. And, prices have fallen by around 20 for white letter.
*For the latest market prices researched by letsrecycle.com click here click here.
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