South East Asia

Over the past three months, there has been limited movement of material to South East Asia. The market has been driven primarily by Europe’s domestic mills, with prices starting to rise in the second half of March. OCC prices were around Euro 120 per tonne ex-works or Euro 140-150 per tonne delivered, but then surged by up to Euro 70 per tonne in the opening weeks of April, before dropping again by Euro 10-20 per tonne in the final week of the month.

During the same period, prices in South East Asia started at around US$ 150 per tonne and climbed to US$ 170-180, only to return to their initial level by the end of April. In India, prices climbed from US$ 185 to US$ 210 per tonne, but this increase lasted only around 10 days before demand declined. The drop was due to European prices becoming uncompetitive compared to the Middle East, the USA and domestic Indian material.

Over the last three months, volumes shipped from Europe to Asia have decreased by 40% to 60%, depending on the week, as European prices remained significantly higher than those in the Asian market. This wide gap can be attributed to: Asia’s struggling paper industry; reduced generation in Europe owing to lower consumption; and the start-up of new paper machines across Europe.

Although shipping costs to South East Asia have dropped significantly from some US$ 500 to US$ 300 per container, and even to India too, European material remained more competitive only until the first week of May.