In February, prices for all recovered paper grades increased in the UK amid low collection volumes, high demand and an expected sea container shortage in March. Shipping rates are also poised to go up, but experts believe that the Chinese mills will again absorb the increase.
Collection volumes on the British recovered paper market were seasonally low, or even lower than normal in February. At the same time demand, especially from the Far East, remained brisk, insiders say. Moreover, all of EUWID’s sources are working on the assumption that sea container rates to Asia will be raised in March and were therefore quickly shipping everything they could get on the water in February.
Most market contacts anticipate that recovered paper prices will rise again in March. They believe that Chinese paper mills will be willing to absorb another hike in freight rates in order to get their hands on material. However, a significant shortage of containers looks to be on the cards as a consequence of Chinese New Year, which might put the dampers on the upward trend in recovered paper prices.