Europe

Europe’s recovered paper market was under persistent pressure in the latter part of 2025, shaped by weak recycled containerboard demand, cautious buying behaviour and a steadily narrowing set of export options. While year-end conditions temporarily slowed the decline, the broader picture remained one of imbalance - particularly for OCC - while deinking and office grades followed a softer but more structurally driven path.

At the start of the autumn, OCC prices appeared more resilient than many market participants had expected after earlier declines. European benchmark levels for OCC hovered around the Euro 120 per tonne range while deinking grades remained closer to the high Euro 180s to low Euro 190s.

This relative stability, however, was not driven by stronger consumption. Instead, the market experienced low collection incentives at depressed price levels, additional storage being used along the supply chain, and export flows supported by exceptionally low freight rates. India emerged as the most consistent export outlet, while East and South East Asia were selective and increasingly reliant on domestic fibre.

Margins for recycled containerboard producers remained broadly comfortable on paper: input fibre costs were often well below finished brown containerboard prices by several hundred Euros per tonne, even after allowing for normal volatility of plus or minus 10%. But those margins did not translate into stronger OCC demand, as mills preferred to manage output rather than chase volume in a weak packaging market.

Towards mid-autumn, European price benchmarks edged lower - but still without dramatic week-to-week moves. OCC drifted down into the mid-Euro 110s per tonne while deinking grades softened slightly but stayed materially higher.

Germany provided an early signal of what lay ahead. Monthly indicators showed packaging grades broadly stable to slightly lower amid weak demand, good availability, and growing stocks among processors and collectors. Deinking material followed a different trajectory: despite a long-term decline in supply, prices eased after previously holding firmer, thus reflecting mills’ increasingly cautious purchasing behaviour.

Although recycled containerboard prices remained largely stable in Germany at that stage, operating rates were reduced and downtime was used to balance inventories - an early sign that fibre demand would struggle to recover quickly.

In late autumn, the market’s perception of risk shifted sharply when China introduced measures that effectively halted imports of dry-ground recycled pulp. This development removed an important indirect outlet for recovered fibre and immediately raised concerns that more European OCC would be forced back onto the domestic market.

At the same time, European containerboard producers failed to implement previously announced price increases, with some early signs of erosion instead. With new recycled containerboard capacity already weighing on the system and operating rates widely described as subdued, OCC lost much of its remaining support.

Non-indexed market reports pointed to renewed declines across parts of western, southern and central Europe, with drops of around Euro 10 per tonne. European benchmark levels for OCC slipped closer to the low-Euro 110s per tonne and then towards Euro 108, reinforcing the sense that the earlier floor was less secure than previously thought.

Despite this, the cost gap remained wide between recovered fibre and finished containerboard products. Even after accounting for normal swings of plus or minus 10%, fibre prices still sat far below output values, underlining that the problem was not margin compression at mills but lack of end-market demand.

As the market moved into early winter, OCC recorded its sharpest short-term benchmark declines of the period under review, while deinking grades continued to edge lower at a slower pace. Contract business echoed this trend, with buyers focused on inventory reduction rather than volume.

Germany’s subsequent monthly data confirmed that the weakness had broadened: mixed grades, OCC and deinking all moved lower, with OCC showing the largest month-on-month fall. Specialty and office-related grades followed suit, with sorted office paper and multiprint repeatedly reported lower - typically by around Euro 10 per tonne - as demand stayed weak and supplier stocks increased.

Approaching year-end, activity slowed markedly. OCC benchmarks stabilised around Euro 105 per tonne while deinking grades slipped further into the high Euro 170s. Some processors reported very low local inventories, reflecting holiday downtime and logistical constraints rather than a genuine tightening of supply.

By the close of 2025, the European recovered paper market had settled into a fragile equilibrium. OCC appeared to have found a short-term floor supported by seasonality and localised inventory effects, although still exposed to weak containerboard demand and the lasting consequences of reduced export flexibility following China’s recycled pulp clampdown. Deinking and office grades, meanwhile, remained under pressure from cautious buying and inventory management despite longer-term supply questions.

The market entered the new year with prices low, margins theoretically intact and fundamentals still pointing to a cautious outlook rather than a rebound.