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Germany

In July, volumes of recovered paper were marginally lower than in the previous month owing to the holidays. For the lower grades, there were sufficient quantities available. Although exports from Central Europe stagnated, additional tonnages from the Netherlands, Italy, France and Spain entered the German market. In terms of demand, it became apparent that many paper mills’ order books were no longer overflowing and that their finished goods warehouses were full. Nevertheless, prices for the lower grades remained stable.

The picture was different for the medium and higher grades. From deinking to woodfree white, there was far too little available. “Customers are chasing each other’s loads,” was the comment from the industry. This resulted in a price jump of Euro 30-50 per tonne. There was a gradual decrease in Germany’s recovered paper imports from the USA and elsewhere. The recovered paper recycling industry became ever more affected by soaring transportation costs which were eating into margins, with freight space being auctioned off on a day-by-day basis.

August proved to be a difficult month overall for the recovered paper industry, albeit with considerable differences between the various grades. The recovered paper from which the recycling industry compiles lower grades (eg, mixed paper, department store material and Natron wave 2) was collected in smaller quantities owing to, on the one hand, seasonal and holiday factors and, on the other, consumer buying restraint.

The Ukraine conflict, inflation and rising energy costs created considerable uncertainty among private end consumers. However, recovered paper from other countries continued to enter the German market. At the same time, a wave of shutdown measures rolled through Germany’s paper mill sector, reflecting not only a drastic decline in orders for new paper but also some planned shuts after a long period of continuous operation. These were likely to be based primarily on a cyclical decline in orders from customers - especially from the packaging sector - and, according to reports, on the partial unwillingness or inability of customers to continue to bear the price levels reached for new paper. This resulted in delivery curtailments for recovered paper and volume cuts. Both the recovered paper recycling industry and the paper mills built up stocks of recovered and new paper.

The prices paid for the lower grades were reduced by up to Euro 70 per tonne whereas the higher grades remained essentially stable in their availability and in the prices they attracted; this also applied to medium grades of recovered paper (eg, files and woodfree chips). Prices for deinked paper dropped in some cases but remained largely stable. The tissue segment was completely unaffected by all these changes.

Exports of recovered paper remained stable at a vanishingly low level in August. There was a slight improvement in global availability of shipping containers and in supply chain issues as a whole. In addition, sea freight rates fell marginally here and there.

In September, the recovered paper industry continued to see a drop in orders as well as some drastic reductions in agreed delivery volumes. At the same time, prices paid for the lower grades were cut substantially, with market experts speaking of the biggest downward step month to month in recovered paper history. This is mainly the result of the order situation, according to industry sources.

Medium grades - with the exception of 2.05 and 2.06/files - were slightly reduced in price; required quantities have been available and have been delivered. This also applies to the higher grades. Opportunities to export recovered paper have improved somewhat and demand itself is very high, but shipping remains the bottleneck and the picture is still dominated by scarce container availability and very short loading times at ports. That said, freight rates have declined slightly. Export outflows helped to counteract the massive build-up of stocks within the recovered paper industry in September.