The recovered paper market in June and July was complicated by political and economic developments resulting from the conflict in Ukraine. Most of the Italian paper industry depends on gas from abroad, with the majority from Russia, and so the uncertainty surrounding supplies is of serious concern to the whole chain.
The lack of a common cohesive approach among Italy’s operators regarding commercial behaviour can be seen in the fact that some mills have no stocks of recovered paper whereas others are working to different policies in terms of supply and production. The same applies to collectors, sometimes working temporarily in joint ventures.
Some supply contract revisions have been seen, as well as some reductions in sales prices depending on the length of contracts, etc. This is creating general uncertainty and confusion.
Selective collection auctions, which had seen a yield quantity reduction of around 2.5%, and those paper mills carrying no stock rushed to buy at rising prices, leading to an increase in the market that was on the way towards stable.
Consistent price increases on mixed papers, for which availability has been scarce, saw this grade approach OCC levels. Deinking materials have also experienced consistent price increases and have been absorbed to a large extent by Germany, while White Ledgers and White I & II have also sustained further increases. Generally speaking, demand for recovered paper remains good and products classified as secondary raw material are proving easy to sell. Collector and merchant stocks are scarce. Although price levels should not see further increases, we have had some surprises in recent months. Paper product prices are appearing to remain stable.
The battle for a Circular Economy goes on and COMIECO is continuing to spend money on costly campaigns to whip up paper collections despite the fact that Italy has already surpassed the levels required by the European Commission. The real problem remains thermal recovery, which is strongly opposed from Rome in the south where recent days have brought large fires at landfills.
Recovered paper exports to the Far East appear rather scarce and freight rates remain a concrete issue. In contrast, there has been an increase in imports from the USA of White grades and Kraft.
And in very recent days, Italy has moved closer to elections that could mean significant changes in several key matters.