UK export prices for ordinary grades take roller coaster ride
From the beginning of the month of March, low collection volumes and a lack of shipping containers caused prices for lower recovered paper grades in the UK to rise and reach peak levels. But the winds shifted in the middle of March, due to higher sea freight rates as well as lower demand from Chinese buyers, EUWID was told. The hike in shipping rates for maritime containers took effect in the third week of March but it was apparently not as steep an increase as originally announced. Most shipping companies are now charging between $1,800-2,000 per container, according to EUWID respondents.
Some market insiders believe that these developments mark a turning point in the market and prices will now decline further. Others believe that the demand for fibre will remain high, at least in Europe, but possibly in Asia too,, and that the market was only undergoing a "temporary adjustment” in March.
The trend on the market for deinking paper in March was not as dramatic. The market was largely balanced since significantly less paper was exported to Asia. "We were offered some volumes in March that would otherwise usually have been shipped to Asia", said one insider in the British converting industry. Still, demand from Continental Europe remains good because the exchange rate is helping make British goods very attractive. Nevertheless, British buyers were forced to react to the price increase for grade 1.02 and increased their prices.
This article is an excerpt from EUWID's monthly report on the paper markets in the UK. The EUWID Price Watch UK for March will be published in EUWID Pulp and Paper no. 12 on 22 March.
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