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After two historic years for recycled raw materials, the market has fallen to earth with a bump.

The packaging sector was the first to be affected from July/August onwards: excessive reel stocks, orders declining around 15% and pressure from higher energy costs led many papermakers to slow production and even implement temporary stops on occasions.

Since the beginning of August, the lower grades market has been shrinking. Prices fell quickly, driven by aggressive cuts on one of Europe’s principal markets, Germany, whose prices went from well above the rest of Europe to well below; orders have fallen more than elsewhere and few tonnes now cross the Rhine. Given electricity and gas costs, some operators have preferred to slow their production, sell their electricity to other manufacturers and play with very high reel stocks.

On the other hand, the drop in prices has revived overseas trading. European prices have become attractive again and customers in Asia are taking everything on offer. The market is adjusting and falling regularly, but the orders are there.

Despite the difficulties of selling on the European market, the drop in collected volumes and the presence of Asian buyers mean that, for the moment, stocks have not risen too much. The end of the year could be more complicated in Europe, with papermakers warning of a very weak December in terms of volumes.

Following in the wake of the lower grades, the medium grades have also started to head downwards this month. The decline in prices for deinking has been very steep, and here too ordered volumes have fallen. There is a risk of running out of space, with customers explaining that their order books are thinning. We have no stock and entries are average, but the market is in a negative spiral. Everything is in place to justify requests for a reduction, and it is difficult to resist for the moment. All grades have been impacted, including office papers, multigrade and CEK.

Finally, the high grades market - which has remained protected until now - has also started to decline slightly. In this market, we are sorely lacking volumes and there is room for trying to resist the decline, but to what end?

Since the end of July and the beginning of August, the world has undergone huge changes. The conflict in Ukraine, the energy crisis, inflation and falling orders from papermakers pushed the market back to pre-COVID levels within a matter of weeks. The end of the year is likely to be complicated in terms of sales in Europe, in particular for materials from municipalities. For the moment, fairly low collections and overseas trading have made it possible not to build stock.

If there is a recovery in Europe, the market could regain some of its impetus. And it should not be forgotten that two new machines will arrive in France in 2023.