Several merchants have told letsrecycle.com that the tissue mills were unfairly reducing the price for tissue grade material and were “biting the hands that feed them”.
Tissue
The price cuts are not a reflection of demand for finished products for which demand remains strong – Kimberly-Clark, for example, recently reported that sales of its consumer tissue products improved by more than 20% this year. But, UK tissue mills have been under pressure to reduce the price they pay for UK recovered material in a bid to strengthen their margins in comparison to European mills.
This is partly because tissuemakers on the Continent can buy their recycled material for lower prices. Merchants on the Continent can cope with lower prices because higher landfill prices mean they can charge more for collecting the office grade material used in tissue making. UK merchants often have trouble in charging for the collection of waste paper because waste disposal costs are so low.
The situation for UK merchants and tissue grades remains finely balanced. One merchant said that it was hardly worth making the coloured best pams grade because of the amount of work involved and if it was made, higher prices could be achieved in the export market. Current UK prices for coloured best pams are between 60-67 whereas in the export market about 70 can be achieved.
Another noted that merchants also have the option export markets for the office grades which include coloured letter and sorted office waste.
Cardboard
There have been no changes in the old-KLS market in recent weeks although rumours of price cuts have abounded. A key question for the sector is how long price increases pushed through to customers for finished material can be sustained.
SCA, in a report on its performance so far this year, has noted that the demand situation in most packaging segments is relatively stable. “Price hikes attributable to raw materials were carried out for corrugated packaging, which should successively gain effect in the fourth quarter.”
Newsprint
“The market for newsprint and magazine paper remains weak.” That is the view of Holmen Paper and sums up the current state of the newsprint market in Western Europe.
Similar sentiment was expressed by SCA, which has a share in Aylesford Newsprint. Commenting on performance for the first nine months of the year, SCA reported a sharp fall in operating profit from publication paper operations of 46%, due mainly to lower prices. The outlook remains bleak, suggested the company.
UK recovered newsprint prices are unchanged with large volumes of material being exported in the face of static orders in the UK. The market is being spurred on here by continuing interest from Shotton Newsprint in securing contracts for supply of material to its plant to serve its new recycled fibre pulp facility in North Wales.
For letsrecycle.com's latest price update see: paper prices.
Subscribe for free