BIR World Mirror on Recovered Paper – Issue January/February 2024: Challenges of 2023 persist into 2024
A concise summary of the BIR World Mirror on Recovered Paper – Issue January 2024. Full version with detailed market reports available in the Members Only section of the BIR website.
The attacks on commercial vessels and ongoing tensions in the Red Sea have adversely affected an overseas trade which was said to have “flourished” earlier in the fourth quarter of 2023, it is reported in the latest BIR World Mirror publication compiled by the global recycling organization’s Paper Division.
The immediate impact has been extended transit times to export destinations in India and elsewhere in Asia as shipping companies have opted to divert vessels around the southern tip of Africa. There has been an upward spike in freight costs as well as reports of cancelled orders and revoked vessel space bookings. From the buyers’ perspective, uncertainty over deliveries has added a new complexity to their raw material procurement planning.
In many parts of Europe, recovered fibre market conditions in early 2024 have been similar to those prevailing for much of 2023, with low demand from the mills and weaker collection rates. In late December, many paper and board manufacturers implemented longer shutdowns than normal around the holiday period, contributing ultimately to an enforced price reduction on the lower grades despite resistance from sellers, it is reported from Germany.
Weak demand and falling prices are said to have become part of daily life for those companies handling the high grades. Despite low collection volumes, strong competition from pulp is said to be making substitutes difficult to sell.
According to feedback from Scandinavia, one positive has been the increase in demand experienced in the insulation sector over the final quarter of last year, for both new construction and renovation.
The contraction in demand continued throughout 2023 for producers in Turkey, particularly for brown paper mills where capacity utilization rates decreased to typically 70%. Contributing factors were the country’s high levels of inflation as well as the effects of the February 2023 earthquake. Paper mills and recovered paper collection companies have been unable to raise their sales prices sufficiently despite increasing costs and falling production volumes.
Recovered paper availability fell around 20% across Turkey last year and stock levels are therefore at minimum levels for mills and recovered fibre businesses. With winter conditions adversely affecting the quality of Turkey’s collected volumes, recovered fibre imports remain an essential component of its paper and board industry’s raw material mix.
Across in the USA, decreasing supplies were behind the January increase in Fastmarkets/RISI PPI Pulp and Paper Week prices for OCC and mixed paper. Domestic mills remain nervous about securing sufficient feedstock to keep their machines running and so have been bidding up prices. OCC, mixed paper and DLK are said to be much in demand across the whole of the USA.
When compared to the same period in 2022, data for the first 10 months of 2023 reveal a reduction in US recovered fibre exports to India, Indonesia, Taiwan and South Korea, as well as to Mexico where last year’s decline in shipped volumes is put at around 50%. In contrast, Malaysia and Thailand significantly increased their buying of US material.
With contributions from its members, BIR publishes periodical commodity reports under the label "BIR World Mirror". These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.
The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.