‘New capacities in Southeast Asia should raise demand for waste paper’
‘New capacities in Southeast Asia should raise demand for waste paper'
- Prices of recovered paper are not necessarily dropping in the next months
- Due to high inflation people are consuming less.
Recently, The Pulp and Paper Times interacts exclusively to Mr. Andreas Otto, VP- European Recycling Industries' Confederation (ERPA). Mr. Otto spoke about various issues related to recovered paper demand, the present state of European paper mills’ operation and finished paper demand. Here is his full Interview:
15th November 2022 | The Pulp and Paper Times:
Q: What is the present state of European Paper Mills, are they operating or taking a shutdown due to insufficient energy supply?
Mills are operating. Paper mills with a capacity of less than 5% have currently taken a downtime which is normal at this time of the year. Another downtime is being expected by the end of this year. Energy is sufficiently available and gas prices have recently sharply dropped with prices which are even on the level before the war on Ukraine.
Q: The price of imported recovered paper has dropped drastically; It is now coming to Around $ 145 to 160-ton at an Indian port, earlier it was $ 340 in May or $ 250 in July. What reasons do you see behind this drastic drop?
The demand of finished paper which was on a historical peak level during the pandemic, not only in Europe but worldwide, has dropped since mid of this year with a price drop accordingly. One of the reasons may be that due to high inflation people are consuming less.
Q: Is the shutdown of European mills decreasing the price of imported OCC due to the better availability of recovered paper in the market?
Due to the dropping prices in the domestic European markets the exports prices have become more competitive which is stabilizing the domestic price level in return. At the same time the strong US-Dollar against Euro is in favour of exports along with softening ocean freight rates
Q: How do you predict the next six months for Indian Paper Mills, do you think that price would go down?
New capacities become available in Q1 2023 in Southeast Asia which should lead to a further increase of demand in the overseas market. On the other hand, ocean freight rates are expected to further drop. Overall markets will be volatile, but prices are not necessarily dropping in the next months. As a matter of fact, prices have just recently increased.
Q: Is the logistic cost drop down also?
Yes, ocean freight rates are further dropping.
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