Market Report: Recovered Fiber, Netherlands

RECOVERED FIBRE>>NETHERLANDS, EUROPE>>

John van den Heuvel, Peute Papier Recycling

There is a big difference between the export market to Asia and the main market in Europe. There is still very good demand from European mills for all the grades. Mixed paper, corrugated and brown grades, news and pams, magazines and de-inking grades are all in demand.

In Eastern Europe, the new capacity has started up. The new mills in Hungary and Poland are buying here in our area. You look at the distances of 1,400 to 1,600 kilometres driving, but yet they are still trucking material from here to there because there is not enough material in their region. And this is occurring even though we are located next to the Port of Rotterdam, which is often referred to as the biggest paper mill in Europe.

Collection levels are already going down (to summer levels). Normally that starts in July, but it started up in the middle of June. I think this has to do with economic conditions. Thus, there is less material available but demand from Europe is very good, helping prices to stay fairly high.

The problem we have is that we do a lot of export to the Far East. The prices from there are much, much lower than the main market over here—some grades have price differences of between €30 and €40 per ton. We’ve never had that before. It’s a big difference, and the demand from Asia is still low.

What we see right now is that container availability is better; more vessels are coming on line again and sea freight is dropping. It had increased from last year, when it was about $300 dollars per container and then went to about $1,300 to $1,400 per container. Now we can book for between $900 and 1000 per container. That’s a good sign.

Before the summer holidays, we saw that collections were going down from municipalities and from printing houses and other generators. On the demand side, order books of European mills are very good. Mill order positions are filled for 2-1/2 to 3 months—we haven’t had that for several years. They cannot understand why that is, but it’s good.

For de-inking mills, however, it’s very difficult because they have very high raw material prices, but their finished product prices are still under pressure.

Tissue grades are unbelievable. The prices for SOP, white ledger and multi-grades increase every month, it seems, by €20 to €30. Tissue mills have a shortage of recovered fiber. They are using over-issue news and then adding more chemicals so that they have enough fibre.

Thus, the availability of supply is restrained, but on the selling side will be a hot, hot summer because there is not enough material. On the one side it’s nice, but the risks are high and cash flow can be more difficult in these conditions.

I think at least until September, we’ll have a gap between demand and availability.

John Van Den Heuvel can be contacted at john@peute.nl.