Far from all cartonboard manufacturers in the UK are busy enough at present. Many are hungry for orders, some so much so that they are putting their profitability at risk to keep their printing machines running. The mood thus tended to be dim in November, as October had already been slow and an upswing was not expected towards the year's end.
The prospects for the first quarter of 2013 look to be even dimmer. Even relatively busy board converters said in November that their order books for next year were still relatively empty.
In conversations with EUWID, board manufacturers admitted that they had become or were now becoming used to the fact that the market was not very strong. Orders had decreased in size and number. One GC producer told EUWID that it expected that this situation would not alter in the coming 18 months.
Even business with the food sector was cooler than last year and the luxury goods sector, which is typically left unscathed in an economic crisis, was feeling massive effects. The tobacco and whisky industries were the only businesses from which orders were undiminished, one producer stated. Lead times and board availability were not major issues in the UK in November, averaging three to four weeks for all grades or sometimes longer.
The British market was weak across the board in November, be it for virgin-fibre board or recycled board, insiders said. Manufacturers are slightly more concerned about the GC board sector at present. The pressure on GC prices is thus mounting amid weak demand and more and more tender processes initiated by converters or brand owners.
This situation is compounded by a large amount of additional virgin-fibre board capacity that is to come online in Asia in the next two years. Suppliers noted that a few Asian board manufacturers' massive expansion plans would automatically mean that more virgin-fibre board was exported to Europe because the Asian market could not yet absorb these quantities at all. Folding boxboard manufacturers remarked they are taking it slowly with the Far Eastern mills and checking a lot in terms of quality. However, the temptation to source cheap material was strong.
⇒ This article is an excerpt from EUWID's monthly report on the UK paper market. The EUWID Price Watch UK for November was published in EUWID Pulp and Paper no. 47 on 21November.
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