After the considerable drop in recycled corrugated case material prices on the European market over the recent months, corrugated board manufacturers in the UK were also able to negotiate a considerable price reduction in July. Kraftliner prices on the other hand are set to rise.
Paper manufacturers told EUWID that several factors came together to make a price cut unavoidable. On one hand, the pressure from Continental European prices could not be resisted given the imbalance between supply and demand. On the other hand, the overseas export business was weaker than usual. Furthermore, manufacturers lost one of their main arguments for price stability due to the continued decline in recovered paper prices.
However, some market participants already expect prices to stabilise again in August and believe they could rise again as early as September. They explained that demand had picked up and many customers wanted to fill their warehouses in anticipation of a price increase.
Some producers, on the other hand, were not as optimistic: they said they were already negotiating a further reduction for August. A ray of hope was the reduction of European inventory supplies to 525,000 t in calendar week 29, said one producer.
The market for kraftliner in Europe has become surprisingly tight since the accident at Smurfit Kappa’s Cellulose du Pin site. The French mill is expected to remain closed until at least mid-August. European manufacturers said that the insolvency of Norwegian producer Peterson and fewer imports from North America were helping to create the perfect conditions for them to launch a price increase. Converters, for their part, continue to argue that a hike cannot be carried out owing to the weak prices for recycled corrugated case material.
⇒ This article in an excerpt from EUWID's monthly report on the UK paper market. The EUWID Price Watch UK for July was published in EUWID Pulp and Paper no. 30 on 25 July.
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