The good performance of the recovered paper and board market is showing no signs of weakening, with selling prices continuing their gradual improvement. Demand in Europe remains highly satisfactory as customers can point to good order books and a decent outlook for the next few months.
Collection tonnages are struggling to recover to their pre-COVID levels. At the same time, there has been a sharp drop in deinking volumes in favour of packaging, with the proportions changing quickly at sorting centres.
For the lower grades, the market is being driven by Europe where effective handling of the COVID crisis has enabled a strong economic recovery. Demand for packaging is robust, boosted among other things by e-commerce and the transition from plastics packaging to paper.
There is clearly export demand from Asia but the cost and logistical challenges associated with container shipments are not facilitating overseas trading. This has not prevented the local market from thriving and prices have been rising. Paper machines are running at full capacity but still cannot satisfy the needs of every customer. The main focus is on having enough recovered paper and board, avoiding any risks regarding stocks in order to best meet demand.
Conditions for the medium grades are somewhat different. Until the summer, this market had been doing less well in terms of newsprint reel sales, but the situation has improved since then and prices of reels have increased sharply. The drop in deinking collection volumes and the high prices for OCC have led this sector to accept several price increases on recovered paper and board.
The situation is the same for coloured papers. Demand is good but volumes have fallen sharply owing to teleworking trends. Prices have been rising continuously for several months.
For the higher grades, the market climbed at the beginning of the summer but did not follow the same trajectory as the other grades. This market is different as it correlates most closely with pulp.
It has been an historic 2021, with positive prospects for the years to come. Two new machines will arrive on the French market in 2023, with an expected annual consumption of over 1 million tons; the rest of Europe has not been left behind, with many new machines set to be installed by 2025. At the same time, the regulatory framework will become more restrictive and so the industry must be able to adapt.