The lull in the marketplace – with UK mill prices the same for May as April – comes after several months of strong demand and rising prices. No upturn is expected before September 2003 by when the pre-Christmas demand usually kicks in. Pulp prices have also peaked with some grades edging down.
Apart from the good stocks in South East Asia, the region is said to have received large volumes of mixed paper and news and pams (magazines) from the United States with some reports that material has been effectively “dumped” in a bid to ensure markets. Now, the Asian buyers are reducing demand and they are keen to pay less because of the lower prices in Europe. However, material is still in demand overall and while the Indian mills are actively seeking mixed paper, price falls are expected there as well.
As a result of the deep-sea export market not proving so attractive for UK and other European exporters, the UK's domestic mills are finding supplies easier to obtain.
Price falls
At the same time as the halt to price increases in the deep-sea export sector, price falls are also being recorded on the Continent. Consumption in Germany and France has fallen for old-KLS (cardboard) and prices have dropped by about 20 Euros for all grades.
Domestic mill prices for old-KLS are still unchanged at around the 55 level but a reduction is thought to be possible at the beginning of June or even before then. Some mills are said to be taking down time to prevent them from having to buy material ahead of price falls. However, there may be some reluctance to drop prices as UK board mills, taking advantage of the weaker Euro, have found it easier to export finished product onto the Continent. And, because the mills have also successfully forced through price rises for their products they may be worried that the buyers of these products might complain if they see the mills paying less for their raw material.
Newsprint
The UK newsprint sector is seeing increased volumes of used newspapers collected from local authority schemes but is facing poorer demand from the newsprint industry. Newspaper circulations have fallen and pagination remains low because of weaker advertising.
Because of this weaker demand in the domestic market, there is every expectation that more local authority material will be sold on the export market. Existing newsprint mills such as Aylesford and Bridgewater are known to be actively selling material while Shotton is fighting to build supplies ahead of the opening of its new newsprint recycling capacity.
Office grades
The market for printings and writer grades material, including best whites and office grade, remains stronger than for old-KLS and newsprint. A continuing shortage of printers material – resulting from low activity in the sector – is resulting in a shortage of recovered material. This coupled with steady demand from the tissue mills means that mixed paper, office grades and best white are in demand. White office paper is especially sought after in the export market by German and Austrian buyers.
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