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Germany

Volumes of recovered paper were quite high in the first half of January, especially from households, but there was a subsequent decrease in the collection of brown paper. Deinking grades were also less available than in the previous month. It remains unclear whether this can be explained solely by graphic paper’s continued slow decline or whether sorting the reduced proportion of white grades from collected material was becoming less attractive. Manufacturers of packaging paper remained very busy and bought recovered fibre in large quantities. Recovered paper exports also continued to do well, and there was a slight improvement in the low availability of containers for India and South East Asia, linked to high sea freight costs.

The industry was able to fulfil all recovered paper orders. Prices of mixed paper and department store grades increased in the small double-digit range, and deinking grades also climbed higher. Export and domestic prices were in balance.

Owing to the continuing lockdown in February, many companies remained closed and there was no recovered fibre to be obtained from them. Estimates of the volumes in February vary, with some putting collections at between 80 and 85% of normal in terms of weight.

There was a resumption of recovered paper shipments from the UK to Germany, although not in the same volumes as in the previous year owing to difficulties at the EU border. At the same time, the cardboard industry was running at full speed. The lower grades and mixed paper, as well as department store and deinking grades, were correspondingly in demand. This was reflected in a price increase of around Euro 10-15 per tonne at the beginning of February. In mid-February, under-pressure mills offered a further Euro 5-10 per tonne in order to attract additional material. While this was not always easy, the recovered paper industry did its best to satisfy the orders of the domestic paper industry.

There was stable demand, meanwhile, for the medium and better grades. CEK was increasingly in demand and prices increased, and there was also very good export demand for the brown grades, resulting in price increases. However, the temporary worldwide shortage of containers, combined with the significant increase in sea freight rates, dampened this price increase. As a result, export prices could not compete with those in Germany and the exportable quantities remained in the home market.

For almost the entire month of March, there was increased demand for lower grades from the German paper industry - a situation replicated across Europe. Packaging producers in Germany were running at full capacity on the back of high domestic demand and strong export orders for German-made packaging. At the same time, collection volumes in the commercial sector were down approximately 30% when compared to the same period in 2019 and so the recycling industry was under severe pressure to meet the needs of its customers.

Exports of recovered paper, which were previously indispensable for reasons of surplus, came to a standstill. On some occasions, paper producers were outbidding each other to secure recovered paper. Demand for the medium and better grades remained healthy but price increases were marginal.

In the final week of March, slightly more relaxed signals were coming from paper producers: Their raw material stocks had recovered to the extent that production was secured over Easter.