The following is a report provided by the Bureau of International Recycling.
Czech Republic It will not be clear until the autumn whether the slowdown which has typified the second quarter is more than a passing phase. Export potential is limited and offers no real alternative to the lack of domestic demand. Although prices were low during the first three months of the year, mills were purchasing all available recovered paper. But subsequently demand fell - especially for bulk and all mixed qualities - and prices dropped by 20% across the whole range of grades.
France The market is very strange. In the case of pulp substitutes, despite the decreasing value of primary pulp, prices are stable, demand is high and material exceedingly short. Since the second part of June, the outlook for deinking qualities has brightened considerably, yet during May disinformation was rife, suggesting lack of orders, excess stocks of raw material or finished product, and so on. At the beginning of June German mills wanted to cut the price, but have since increased it in an attempt to obtain deinking material from France.
Prices of OCC and mixed were steady throughout the second quarter, but mill stocks declined in May as demand increased and higher prices were paid for spot tonnage. There was brisk demand from Dutch traders - but for material destined for the French market.
Finland The market is virtually in balance with particularly good demand from the newsprint and tissue sectors, although some coreboard producers took downtime during the spring. Stocks held by mills and merchants are low. However, the market is showing signs of weakening and the second half of the year could be more challenging.
Collection during the first five months was only slightly above the level of the same period last year, yet the rate was at over 80% for OCC and 75% for news. Further progress will requires hard work and a rise in paper consumption.
Germany Supplies of recovered paper gradually slowed in June and although demand was quite stable profit margins of some lower grades narrowed a little. Strong demand ensured price stability for deinking material. Exports to South East Asia strengthened after a period of limited activity, lower freight rates and a strong US dollar slightly improving profitability.
During May supplies were abundant and in the case of supermarket corrugated material outstripped demand. Price differentials between grades were sometimes considerable, and mills were purchasing only when absolutely necessary, in part reflecting downtime in the corrugated sector. Better grades were affected by declining pulp prices.
Holidays led to a slight reduction in availability in April when mill intake was satisfactory and margins unchanged except for erosion in the value of higher qualities.
The Netherlands Far Eastern prices are now on a par with those in the domestic market, and exports have risen. With lower freight rates in June combined with the high value of the US dollar against the euro, demand is expected to remain good. At home, mill activity has declined and downtime is likely during the summer months when a seasonal decline in collection will keep merchants' stocks low.
Prices of pulp substitutes have fallen in tandem with the pulp market, the exception being unprinted white which remains short.
During the spring Dutch prices for bulk grades were relatively stable, but reductions for mixed and OCC were introduced in June.
Changes expected to the Dutch packaging regulations could jeopardize the future of the voluntary agreement on paper recovery between industry and the government that ends this year.
Spain Low generation of most grades - especially from printers and binders - helped to stabilize the market in the first quarter. In general, current mill order intake is somewhat weak and producers of packaging materials are exporting at low prices. The position of tissue manufacturers is more positive and their selling prices are stable.
No change is expected in the market for low grades until the end of the summer. Prices have been stable since January while stocks held by consumers are at mid level and those of merchants low.
Among deinking materials, demand for overissue news is very good and prices are improving a little.
Despite the decline in the pulp market, prices of substitute grades are holding well and no significant change is expected in the near future. Demand is good and generation low.
Turkey Higher demand for OCC and mixed grades which developed in May stabilized in June, but there has been a seasonal decline in collection and mill stocks are low. In the second quarter, publishers' consumption of newsprint dropped by 50% and both supply and demand for news declined. Demand for high grades improved slightly during the period and prices are expected to rise in the near future. In general, sales of new paper and board have not been good.
Market conditions are not conducive to imports of recovered paper and unless prices drop the situation will not change. Fluctuation in currency exchange rates continued during the second quarter, but values should be back to normal by the autumn at the latest.
United Kingdom Despite falling prices for most grades, continuing the trend of the first quarter, and lower order intake in many mill sectors, demand has remained generally good. Consequently, merchants' stocks are very low.
Export opportunities to the Far East improved, reflecting lower freight rates, while demand from mills on the near continent has been constant - especially for corrugated and news qualities. Overall, supply and demand are in balance, but lower summer collection may lead to shortages of some grades by the end of the third quarter.
Higher packaging recovery targets for 2001 are stimulating increases in the value of Packaging Recovery Notes from a very low level at the beginning of the year.