October 14, 2022
(press release)
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A concise summary of the BIR World Mirror on Recovered Paper – Quarterly Report October 2022. Full version with detailed market reports available in the Members Only section of the BIR website. After a couple of stellar years for recycled raw materials, the market has fallen to earth with a bump, according to the latest BIR World Mirror publication from the global recycling organization’s Paper Division. The speed of change in market conditions has been startling, with falling orders from mills said to have pushed the market back to pre-COVID levels within a matter of weeks. Prices for the lower grades have fallen most sharply of all, amid extremely low demand worldwide as well as high stocks at paper mills and also at collection plants. Mills have been unable to pass on rising costs - most notably for energy - in their sales prices because demand for their finished products has been diminished by the impact of the financial crisis on expenditure. Europe is where prices have fallen fastest during recent months, and further downtime is expected at many mills. As a result, the recovered paper industry has suffered not only a drop in orders but also some drastic reductions in agreed delivery volumes. The end of the year could be even more complicated, with mills warning of the prospect of a very weak December in terms of volumes given intractable issues such as the conflict in Ukraine, the energy crisis and inflation. Although not as hard hit as the bulk grades, deinking has suffered sharp falls too; even the higher grades are now beginning to show some signs of weaker values. Collections across the entire recovered fibre sector have witnessed a significant decrease over the last two months. Exports are widely seen as a potential pressure valve for the stocks that have been building within the recovered paper industry. There has been an improvement in container availability and freight costs, and the weakness of the Euro and the pound against the US dollar is helping to make European material more attractive to overseas buyers, notably in Asia where orders are to be found despite regular market adjustments. For example, there are reports that some of the mills in Asia which typically buy OCC from the USA have been turning instead to cheaper supplies from Europe. It should be added, however, that demand in Asia is not particularly strong either. China is ordering neither recycled pulp nor packaging paper from South East Asia or India, and so production in these countries is also very low. Conditions in North America have also worsened significantly in recent months, with demand and prices dropping sharply for the bulk recovered paper grades. Here too, some mills are already taking downtime and this trend is expected to continue in the final quarter of the year. While many industries are struggling with the harsh realities of higher gas and electricity bills, it is reported from Scandinavia that insulation manufacturers are offering a healthy demand for recovered fibre as elevated energy prices are prompting many householders to insulate their homes more effectively. Also on the upside, profitability experienced in 2020 and 2021 has led paper mills and entrepreneurs in Turkey to announce investments that entail around 4 million tonnes of additional capacity being activated over the coming two years. As a consequence, the country expects to become an exporter of finished paper while remaining a major importer of recovered fibre. With contributions from its members, BIR publishes periodical commodity reports under the label "BIR World Mirror". These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.
The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.
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