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Germany

By and large, the paper industry continued to produce over the Christmas holiday period without any shutdown measures. As a result, it was able to resume collecting recovered paper immediately at the start of 2022. Some mills entered January holding stocks of recovered paper and used this fact to impose price reductions for supermarket grades and corrugated board in the low double-digit range, although there were regional differences.

The recovered paper recycling industry experienced comparatively low fibre availability, affecting the lower grades as well as the middle and higher ones. Owing to continued very good demand, no stocks were built up by processors. Recovered paper imports into Germany proved to be steady at the start of the year although there were initially lower volumes from the UK owing to logistics issues. The middle and higher grades were stable in terms of prices whereas demand was high.

The recovered paper market was inconsistent in February. There were slight price reductions for printing/files, which could be explained by the high season for document destruction at the beginning of the year and the corresponding impact on availability of these grades. In addition, there were also slight regional increases in supermarket/corrugated board, as well as regional stability here and there.

Paper industry stocks of recovered paper grew slightly owing to, among other factors, machine stoppages linked to repairs and COVID-related staff absences. The order situation in the paper industry remained very good. For the recovered paper industry, everything processed could be sold and no stocks were created.

Imports of recovered paper were stable at a high level. In addition to internal EU sources, the UK and the USA became staple suppliers. In terms of exports, demand in the brown sector was very good and prices increased. Unfortunately, sea freight rates remained at a high level whereas the shortage of containers eased.

Normal amounts of recovered paper were collected in March and demand from the paper industry remained good, leaving the market relatively balanced. The order position of our customers was varied: while demand for food packaging was high, the run on industrial packaging eased somewhat. Paper mills that were not leading the way with their prices in January/February had to catch up. Here and there, and with regional differences, there were price increases for mixed paper, supermarket grades, corrugated board and deinking, partly supported by the fact that export demand for recovered paper increased somewhat. Among the middle and higher grades, prices stagnated at a high level; here too, there were only slight upward regional price adjustments. Recovered paper processors were still holding no stocks whereas the paper industry had reasonably well-filled warehouses.

The energy cost explosion following the outbreak of the Ukraine conflict has placed a great burden on our industry and also on our customers. Transportation has become more difficult and around 10-12% more expensive - an increase that has yet to be passed on to the end consumer.

Recovered paper collection volumes were at good levels in April, with the Easter holidays not leading to any exceptional decline. Overall, demand for recovered fibre from the paper industry was also very healthy. There was a continuation of the developments seen in March, with food packaging in strong demand but industrial packaging comparatively less so. The qualities of recovered paper required by busy newsprint manufacturers continued to be in short supply. Recovered paper imports from the UK into Germany became more difficult at times owing to massive internal changes at a major ferry company.

Indeed, all parties in the paper chain are suffering from a multitude of problems surrounding logistics and energy. In addition, there is massive uncertainty about how the Ukraine crisis will develop and its likely consequences. Cost increases as well as rising inflation are already leading to partial restraint being shown among consumers.