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Germany

At the start of the final quarter of 2021, the German recovered paper market was relatively balanced in terms of supply and demand. The slight acceleration in collection volumes was slowed by the autumn holidays and the paper industry purchased everything that was available, partly no doubt to build up their warehouse stocks.

Attempts were made to reduce prices for the lower grades and, following tough negotiations, the paper industry was able to push through a decrease of Euro 10-15 per tonne. Overall, however, prices have remained stable at a very high level for an unprecedented length of time.

The medium and higher grades of recovered paper were also in good demand at the start of last year’s final quarter. It remained difficult to secure recovered paper from the USA given the continuing container shortage but, otherwise, import volumes were stable such that the recycling industry was able to satisfy the demand from Germany’s paper producers.

In November, recovered paper volumes remained roughly at the previous month’s level. As a result of supply chain problems, lower availability was noticeable regionally among the automotive industry and its suppliers. Demand for recovered paper remained very high, and even increased in some cases. In the deinking sector, paper mills apparently used a proportion of what they had ordered so as to build up stocks. Prices for many recovered paper grades remained stable in November but slight decreases were recorded for mixed paper, supermarket grades and Natron paper. Freight costs were on the increase once again, by around 5-10%.

In December, supply of recovered paper remained constant and demand continued to be very high, leading to a sideways market. Producers soaked up the available recovered paper, again in part for stock-building purposes given the considerable uncertainties surrounding COVID and the desire to avoid logistical bottlenecks over the holidays. According to reports, paper mills planned no shutdowns for the end of last year. With regard to recovered paper prices, only tissue grades sustained a small decrease whereas the rest remained unchanged.

German exports of recovered paper barely merit a mention. The prices obtainable in Asia fell somewhat owing to an oversupply of recovered paper from the USA, especially in the “brown” segment. The shipping of recovered paper to India was still not allowed in accordance with the amended Regulation (EU) No. 1418/2007. Although the European Commission recognized that this was due to a formal error by the Indian government, the subsequent correction procedure will take several weeks to complete. Spain and Italy are still shipping to India because both countries have already implemented an “end-of-waste quality” for recovered paper. The Dutch authorities, meanwhile, are allowing shipments of recovered paper to India because of the acknowledged mistake made by the Indian government.

Regardless of the legal classification of recovered paper, shipping remains difficult. Although global supply chain problems appear to be easing a little, freight rates are continuing at a high level.