Recycled corrugated case material producers face growing calls for price cuts in Germany

Source: EUWID
08 Nov 2016 − 

Stocks have been falling, but new capacities are said to be coming into play

Suppliers of brown recycled corrugated case material say they are increasingly being confronted with calls for price reductions in Germany. For November, buyers are aiming to realise price cuts of €5-10/t. They say they have already achieved price reductions and concessions in recent months in individual agreements even though the overall debate was about price hikes.

Recycled containerboard producers are calling on their competitors not to give in to growing downward price pressure. They say that giving in would be fatal as paper mills have had to trim €50 of prices of new paper over the course of the year while the higher recovered paper costs are squeezing margins. Ultimately, they argue, activity levels in the strong month of November do not necessitate making any compromises. EUWID respondents on the supply side of the market assert: "We are fully booked”.

Also the tiresome problem with the high inventory levels at paper mills is reportedly more under control again. In recent weeks, these levels had been falling steadily, industry representatives say. However, it seems that there are psychological factors coming into play at times in light of new output capacities. Some market participants appear to be panicking and are already now focusing on securing volumes. "The skies are clouding over, we cannot completely rule out falling prices”, summarised one industry observer.

This article is an excerpt from EUWID's weekly report on the paper markets in Germany. For more details see EUWID Pulp and Paper no. 45 of 9 November 2016.

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