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France

After an historic first half to 2022 but a more difficult second half, the first quarter of 2023 followed the latter trend. Collection was not good, particularly for paper, and stocks at recyclers’ facilities were low but for only a few cases. Activity among paper mills was similarly low, with production falling 21.9% in March. Owing to thin order files, many customers were obliged to adapt by either slowing their production or even stopping machines.

Having been at high levels last year, paper reel sales prices have been dropping constantly for several months. Paper mills are anxious, not least because the energy crisis has impacted

the profitability of the entire industry. Germany, the largest paper market in Europe, is not buying in France.

Regarding the low grades, the domestic market improved in April under pressure from southern Europe. This movement is also explained by low stocks at mills, weak collection volumes, the presence of Asian buyers in the market and a short month in May punctuated by a number of public holidays.

Export sales were available at the beginning of the year but recent weeks have been more of a struggle. Demand is average and some downward price adjustments have recently been proposed.

VPK Alizay and Golbey are scheduled soon to unveil new paper mills in France although start-ups could be postponed in response to a lifeless market.

In a quiet medium grades market, paper mills need more orders. Some grades are proving difficult to sell. The deinking market keeps falling owing to a lack of orders for newsprint.

The German market has been impacted more than any other, with very regular stops at some mills. Switzerland and Benelux are buying a little in France while the Spanish market seems to be in better health but with lower prices.

Conditions are hardly better among the other grades: there is no demand for tissue (SOP), and the same applies to CBS and scanboard. Asian demand for SOP or magazines was at normal levels at the beginning of 2023 but has been declining over the last month.

The high grades market is gradually becoming more difficult amid flat demand and decreasing sales prices. The same is true for paper pulp, with very low spot prices creating competition for our grades among the customer base.

Despite low sales, recyclers’ stocks are growing only slowly because of the reduced collection volumes.

It is already clear that 2023 will be very different from last year. Nevertheless, it must be remembered that the prevailing prices have been encountered many times before and that we must adapt to the markets’ cycles because, as always, the wheel will turn. The market has changed: faced with high inflation rates, consumption has dropped and all recycling activities have been impacted.

Decreased volumes and additional energy costs have complicated the situation, prompting some major manufacturers to take market positions by reducing sales. As for the rest of this year, developments will depend on whether or not consumption makes a comeback. After a complex post-winter period, let us hope the sunnier days ahead lead to a brighter economy.