FOEX: Paper packaging prices down in Europe; containerboard down with dwindling demand, recovered paper down with export price slide, increased inventories
November 1, 2011
– Containerboard Europe – The slowdown of the world economy impacts the volumes and prices of packaging materials, even if less than in printing and writing papers. Earlier strong demand in Latin America and in Middle East and much of other Asia has been cooling off since summer. This impacts the exports from North America and Europe. The month of September was not bad in the US market with box shipments down by just 0.4%. Inventories did go up, however. In Europe, demand has been dwindling especially in the Mediterranean countries. The falling of both virgin fibre and recovered paper prices adds to the downside pressures on prices. Declines reported for October were about 10-15 euro for unbleached kraftliner and 20-30 euro for testliners and recycled based fluting. Data received over the last week of October brought also the white-top kraftliner price southwards. The currency movements meant a downward pull on our benchmarks as the Euro strengthened against both the USD (by 2.6%) and the weighted basket of the non-EMU currencies (by about 0.7%). Our PIX Kraftliner index lost 3.95 euro, or 0.7%, and closed at 559.76 EUR/ton. The PIX White-top Kraftliner index retreated by 3.32 euro, or by 0.42%, to 783.79 EUR/ton. Our PIX Testliner 2 index fell by 3.84 euro, or by 0.8%, to 474.75 EUR/ton. PIX Testliner 3 index lost 2.71 euro, or 0.61%, settling at 440.95 EUR/ton. Finally, our PIX RB Fluting index fell by 3.11 euro, or by 0.71%, to 432.86 EUR/ton.
Recovered paper Europe – Gradual weakening of the demand growth rate for the various RCP grades in China and in other export markets has led to price declines which amounted to typically about 10-20 euro, depending on the market, for October shipments. The export price slide and the risen inventories in Europe have impacted the price levels also in Europe. The quotes received over the last week of October sent our OCC 1.04 index further down, even if by only 43 cents, or by 0.32%, to 135.30 EUR/ton. The price differentials to containerboards all narrowed this time: against Testliner 2 the gap was reduced by 3.41 euro to 339.45 EUR/ton, against Testliner 3 the differential shrank by 2.28 euro to 305.65 EUR/ton, and against RB Fluting the gap narrowed by 2.68 euro to 297.56 EUR/ton. Our PIX ONP/OMG 1.11 dd index declined by 79 cents, or by 0.49%, to 159.74 EUR/ton. As the PIX Newsprint benchmark retreated more marginally, the differential to PIX ONP/OMG 1.11 widened by 47 cents to 350.05 EUR/ton.