FOEX: Paper packaging prices in Europe mixed; containerboard grades see increased raw material costs, weakening Euro, recovered paper prices narrow yet remain up
March 13, 2012
Containerboard Europe – The cost pressures were evidenced in the North American linerboard business with another 5 US dollar hike in the OCC prices. Activity has remained relatively good through January-February and both box and corrugated medium price hikes have been announced from April 1. In Europe, raw material costs have turned to a fairly clear increase since February. Consequently, the containerboard producers have announced considerable price increases to be effective from Feb-Mar, for both recycled and virgin fibre based grades even if the demand pull is not the greatest with the struggling general economy of the region.
The price quotes received by us were mixed this time as both higher and lower prices were registered, depending on the market. Also the currency movements had a mixed impact on our indices this time as Euro weakened against the USD by 0.2% but strengthened by about 0.4% against the weighted basket of the non-EMU currencies. The PIX Kraftliner index retreated by 1.05 euro, or by 0.2%, and closed at 512.87 EUR/ton. The PIX White-top Kraftliner index value fell by 3.07 euro, or by 0.4%, and closed at 758.36 EUR/ton. For Testliner 2, with the stronger Euro, the index dropped by 1.58 euro, or by 0.36%, and settled at 434.78 EUR/ton. PIX Testliner 3 index value rose by 3.33 euro, or by 0.8%, and landed at 418.00 EUR/ton. Our PIX RB Fluting index headed higher by 2.61 euro, or by 0.65%, and closed at 406.97 EUR/ton.
Recovered paper Europe – RCP market has continued to be impacted by conflicting price drivers. Demand for packaging materials in Europe is not strong but mills appear to have been building up raw material stocks. Increased sea freights and lack of containers have made exports to China difficult. With low regional demand for paper and board, the supply of recovered paper has been flat or has even retreated. The PIX OCC 1.04 dd benchmark moved up by 4.48 euro, or by 3.4 %, and closed at 136.20 EUR/ton. The price gaps to containerboard prices all narrowed. Against Testliner 2, the gap diminished by 6.06 euro to 298.58 EUR/ton. Against Testliner 3, the differential narrowed by 1.15 euro to 281.80 EUR/ton. Against RB Fluting, the gap decreased by 1.87 euro to 270.77 EUR/ton.
Our PIX ONP/OMG 1.11 dd index headed higher, too, but little less than OCC, i.e. by 1.15 euros, or by 0.9%, and landed at 127.36 EUR/ton. The differential of newsprint to PIX ONP/OMG 1.11 narrowed by 2.94 euro to 380.35 EUR/ton.