RTGE January Issue: Extended Recovered Fibre Market Reports
Europe/Far East - Joris De Caluwe, Ciparo bv
Western Europe - Dominique Maguin, La Compagnie Des Matieres Premieres
Netherlands/Europe - John Van Den Heuvel, Peute Papier Recycling
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RECOVERED FIBRE>>EUROPE, FAR EAST>>Joris de Caluwe, Ciparo bv
Fibre generation has been a struggle in 2009. A poor economic climate is main driver for this. Some economies in Europe (e.g. Spain, Greece, Ireland) are performing very poorly and generation has dropped in the Netherlands even more.
Local demand for material is quite good. Some new machines have come into production in Poland, Germany and Hungary and where they are running, mills are buying inventory. Demand from overseas is also good. Prices are moving upward and there is little to no inventory with paper merchants. Material is mostly being exported to China, India, Indonesia and Korea.
Among the paper grades, OCC is in a very big demand, as are mixed papers. There are some issues with licenses for China and concerns of arrival during the Chinese New Year, which have caused some shipments to be postponed until the second half of January. Prices have risen about euro 10 per metric ton over the last month. Deinking grade ONP 70-30 is also in good demand both locally and on the export market.
Currently, there are strict inspections at various harbors in Europe, leading to delays of shipments. Also there are issues with documentation. Each member-state of the European Union has its own way of working and interpreting the EVOA laws, leading to an unlevel playing field within the EU. In China there are harbors that have 100 percent inspection on waste shipments done by customs, which leads to long delays. Clearance takes about 4 weeks now in some harbors
Apart from the Government interference there is a shortage of containers in most of the European ports. The expectation is that in January there will be some capacity added to the fleet again, which should lead to more containers becoming available. Some countries also report that incoming containers from the Far East have increased over the past two months, which may be a sign of a recovering global market.
Joris de Caluwe can be contacted at joris@ciparo.nl.
RECOVERED FIBRE>>WESTERN EUROPE>>Dominique Maguin, La Compagnie des Matieres Premieres
Mills are demanding material in France, Europe and the Far East. We have a good demand now, which means that prices would have to go up in January. This is a very good sign.
As a matter of fact, we have already seen new inquiries, even for the last days of December, before the New Year’s holiday. People are asking if they can have more material delivered to the mills, which is very unusual. Normally at the end of the year the mills keep inventories low because it is better for the balance sheet. This year it seems that they are missing some tonnage and they are asking for more, mainly with the brown grades. This is a good sign. I would like to say that I am really looking for an increase in prices for the beginning of next year.
Due to the bad weather that we have in Europe, collection is difficult and we are losing some tonnage. Some tonnage is not possible to be recycled so it will be dumped. When you have cardboard packaging with snow on top of it, you may as well go to the landfill and dump it because it is impossible to recycle due to being wet. So we are losing some tonnage.
That may be the reason why the mills are very prudent and they want to add some more tonnage in the event that there are bad days coming. We have had a lot of snow already and that is quite unusual for this period of the year in Europe.
For newsprint and magazine, the situation is very different. These groups of paper mills are still losing a lot of money. For that reason, they are not very able to increase their buying prices. They would like to reduce the production at these mills everywhere in Europe. It is still quite difficult to sell to these mills and when you sell to the mills you just pray to have your bill paid.
The slowdown in payment is mainly due to the fact that the mills have been losing money for a long period already and the banks are not supporting them very well. Credit insurance companies are not supporting their customers very well. They are always reducing the level of money they can borrow if you have a contract. They reduce month after month.
The tissue sector is doing very well. The demand is there. Prices are more than correct and we are expecting an increase in price again for the beginning of next year. We have more good signs coming.
The last point that I would like to make is that the pulp substitute that is utilized by the mills to replace the virgin pulp is also moving up because the price for primary pulp is going up quite rapidly in the U.S.A and Canada mainly. These markets are pushing it up and the substitutes are also going up, which is good.
Dominique Maguin can be contacted at dominique.maguin@cmp-sas.com.
RECOVERED FIBRE>>NETHERLANDS, EUROPE>>John Van Den Heuvel, Peute Papier Recycling
Right now there is new capacity coming into Europe. In Eastern Europe, they are starting up at the beginning of next year so they are busy getting stocks of recovered paper. The collection this year in Europe, because of the crisis, is down 10 to 15 percent. There is also growing demand from Asia because of the new capacity that is coming in over there.
What we have seen over the last few weeks in Europe is that prices are increasing $10 to $15 per ton. Generally, in the first two weeks of December there is a bit more collection because of the holidays but afterward the collection will go down, but the demand will continue.
There is a lot of competition at municipalities, big supermarkets etc., and price proposals are very high. The industry is expecting high recovered paper prices. That’s what I learned last week as I was traveling, especially in Germany. All mills want to talk to us. Right now we do about 1 million tons of recovered paper per year. They like to speak with big groups like us. They want to ensure volumes for next year because they have seen what is going to happen in Asia right now and in Eastern Europe too with the new capacity. So they want to ensure volumes for next year.
Tissue grades are quite stable. There is not more demand than before and the prices are quite stable. For finished product newsprint, prices are dropping 16 to 18 percent as of mid-December.
Right now, the weather is bad. Now it is freezing here. Minus 5 to minus 10 degrees. A lot of snow is falling. We see that collections for all of this week are canceled in the Netherlands. We also are seeing weather issues occurring in Germany. Recently in Germany it was minus 34 degrees.
Two months ago all of the mills announced that they were slowing down until the holidays but in mid-December they were running. They will be running in the coming weeks directly after Christmas too. But on the other side they need recovered paper. The logistics in these regions are very difficult and also the collection is very difficult. Mills are prepared to pay premiums to get volumes.
John Van Den Heuvel can be contacted at john@peute.nl.