Tough environment fostering defensive buying strategies

I would like to welcome all readers to the latest World Mirror on Recovered Paper, featuring reports from around the globe which highlight the fragile market conditions that have followed us from 2025 into 2026. I would urge you to read these valuable insights so as to gain the widest possible understanding of where we are currently positioned as an industry.

In essence, we are experiencing weak demand, heightened price sensitivity and frequent short-term dislocations. Rather than following regional cycles, pricing and buying behaviour have been shaped by a shared set of constraints affecting mills and suppliers worldwide. The dominant factor has been the soft demand for packaging and graphic papers which has dampened mill operating rates and severely limited upside price potential for finished products.

In this environment, recovered paper purchasing has been highly tactical. Across grades, mills have strongly resisted price increases, with buying interest often switching off once raw material costs move more than 5-10% above the recent trading norms. At the same time, any downside momentum has been quickly contained as lower prices instantly impacted collection behaviour.

Another defining factor over this period has been fibre substitution. Low virgin pulp prices at the end of 2025 encouraged mills - particularly in the tissue and printing-related segments - to favour primary over recovered grades. This has dampened demand for deinking grades and pulp substitutes globally, reinforcing oversupply conditions even where structural availability has been tightening.

Policy and trade disruption has amplified market volatility. Late last year, China’s tighter enforcement of recycled pulp import controls displaced significant fibre volumes and impacted established trade flows. The immediate effect was a sharp correction in export prices, followed by hesitant restocking towards year-end and into 2026. However, this rebound was driven largely by logistics, pre-holiday coverage and winter-related supply constraints rather than by any material improvement in underlying consumption.

Even though lower container freight rates reduced headline transport costs, longer transit times, congestion and sporadic route disruptions introduced operational risks that discouraged long-haul movements. As a result, trade flows became more selective and increasingly opportunistic in nature.

Overall, the market is currently characterised by defensive buying, narrow pricing corridors and rapid transmission of shocks, leaving recovered paper prices highly responsive to marginal changes in demand, policy and logistics rather than to structural supply fundamentals.

Hopefully 2026 will bring an upturn in our fortunes, in terms not only of a market improvement but also of more enlightened policy and legislative developments. What the year will definitely bring is plenty of fuel for discussion and debate at our special session to take place at the BIR Convention in Gothenburg across the afternoon of June 1 (14.00 to 17.30). Work is going on behind the scenes to compile a fascinating programme that you will not want to miss.