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German recovered paper market in the balance despite slow export business to the Far East

Price development for supermarket corrugated paper and board in Germany (€/t free delivered).
Source: EUWID
12 Apr 2012 − 

Container shortage curbs recovered paper (RCP) exports to Far East. Good domestic demand and lower arisings of recovered paper prevent excess supply. German RCP prices unchanged at the beginning of April.

Prices for all grades on the German recovered paper market remained unchanged in April. The lack of exports to the Far East is the most unusual feature of the current market situation. According to market insiders, this is not due to weak demand, but rather to the inability of exporters to get access to containers, even if they are willing to pay the sea freight rates, which have gone up by €500 this month. As a result, even orders placed in March had yet to be filled, said a merchant.

The container shortage is said to be caused by ships being held back in eastern Asian ports, apparently to reduce the supply of freight space and make it easier to raise freight rates. Although this had meant that more recovered paper remained on the German market, merchants were able to sell their domestic material, even with additional volumes reportedly coming from the Netherlands.

There is good RCP demand from paper mills, EUWID was told. The companies continuing production through the Easter holidays required inventory. In addition, the three upcoming public holidays in May on which no recovered paper can be delivered may have also have factored into this month's buying. The lower arisings of recovered paper in April also prevented an excess of supply from developing.

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