Germany

A combination of the autumn holidays and the continuing reluctance among private end consumers to buy resulted in recovered paper volumes collected from businesses and households in October being around 20% lower than in the previous month.

On the consumer side, demand for recovered paper remained at a significantly reduced level. Some paper mills took 100% of the agreed delivery quantities, others less than 50%. There was no uniform picture, neither quantitatively nor regionally. At the same time, rejections were more frequent.

For lower and some medium grades, the paper mills reduced their prices by around Euro 35 to 45 per tonne. Coloured and light-coloured files were quoted up to Euro 40 per tonne lower owing to reduced demand for the first time, with multi-print and woodfree white also experiencing a price decline of Euro 15 to 20. Deinked paper was in good demand but could not escape a price correction given the overall environment.

In October, there were no stocks of medium or higher grades within the recovered paper industry while small stocks of the lower grades were to be found only in the south and east of the country. Exports provided a helpful outlet: overseas demand for recovered paper was high and supply chain disruption continued to dissipate little by little. Accordingly, prices for shipped volumes moved sharply upwards and were significantly above levels prevailing domestically.

In November, paper and board producers’ order files were reportedly well below what was possible. The packaging segment was running at around 70% capacity utilization in Europe, with tissue performing similarly. According to estimates, graphic paper producers were running at 90% capacity, with shutdowns and machine rebuilds making themselves felt. Exports of recovered paper were satisfactory in November. Excess quantities flowed out, especially from Western Europe, and thus provided relief to the German market. Prices paid for the lower grades were adjusted slightly upwards in the West. Only files and printing grades, which had been stable for a long time, fell again in price. Likewise deinking saw reductions of up to Euro 50 per tonne. Higher grades were stable.

According to a market expert, the paper machines of the “big all-rounders” ran at full speed leading up to the festive period in December, and then partially until the year’s end. Up to that point, energy prices were still advantageous owing to annual contracts, etc. Manufacturers’ warehouses were filling with new paper and some smaller factories planned shutdowns for Christmas. In western Germany, as well as in the Netherlands, Belgium and the UK, there were further slight upward price adjustments for the lower and kraft grades, mainly because of reasonably good exports of recovered fibre which are urgently needed. While demand from Asia is high, price remains the bottleneck. Mills in Eastern and Southern Europe also increased their prices slightly.

There is a clear market advantage for those in the paper/board industry that have their own processing facilities, have their own corrugated board plants and can supply themselves; manufacturers without these pluses are reportedly much less busy and are having to cope with low order volumes and falling new paper prices at the same time as rising energy costs.

In the second half of December, sales of recovered paper declined and inventory build-up on the supplier side was unavoidable here and there. Sales of files and printing paper fell slightly whereas prices for the deinking and higher grades remained stable.