Recovered Fibre>> Netherlands, Europe >> John van den Heuvel, Peute Papier Recycling
There was already a lot of competition and the competition has grown and become stronger and stronger. We see price increases at the sources. For example, we look at official publications and when there is a tender we need to pay a fixed rate above official publication. When you look at it in May or June this year and when you look at it now, there is an increase of €20 to €25 per tonne, so that means mills are willing to pay between €20 and €25 per tonne more for the recovered fibre to assure volumes for the next year or years. That is what we see right now.
European mills are running well and producing, During Christmas time there often are mill closures or they do [less] work. For the moment, they are all running well and I foresee no price pressure for the coming months.
We see demand from the Far East here in Europe is increasing as well. There is a lot of demand. We see the dollar become stronger at the moment. Sea freight is dropping, so it is more interesting to buy in Europe and collections are increasing right now. It is always around this time period, the holiday time, that there is more material in brochures and so forth. There is more material available at the moment, but it will all be absorbed and there will be no stock at the waste paper merchant level and there will be low stock levels at the paper mills in Europe.
We see a lot of problems at the printer houses. There were a lot of bankruptcies last year and it is continuing this year as well. They are in very bad financial positions; they cannot earn any money. At the moment they have problems from the price increases from the paper mills. They’re all increasing prices for magazine paper and newspaper. These are increases of around €100 per tonne. And the printer houses [often] cannot increase the price to their customers.
Mills are running very well and already had three price increases this year; customers accept it and they can calculate it into finished product as well. What we all hear and see right now is everybody is counting on higher recovered paper prices for next year.
When winter comes, it is bad for collection. The U.S. forecasts snow as well, and snow gives problems at the collection side and at the mills as well because there are no stocks of incoming paper.
There is more demand coming in from Asia from the tissue mills as well as well for office spec from China. Also, some European mills have started new machines and are going to use office spec as well. The demand for that grade will increase.
There is not a problem getting containers. There are plenty available. Shipping lines like to offer pitches and then you can negotiate the prices.
The competition is coming from all of Europe. It is not only recovered paper companies against each other, also the mills are fighting against us. They go directly to the sources. We supplied these mills in June and we were partners. Now we are partners but competitors as well.
John van den Heuvel of Peute Papier Recycling can be contacted at email@example.com.