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Major slowdown reported in Chinese buying habits

Date: Wed, 4 Jul 2012 | Author: Paul Sanderson

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Chinese buyers are continuing to reduce their purchases of materials, according to sources.

SCM scrap-ex understands from our sources in both China and the UK, that there has been a large reduction in orders in the last week or so on top of a general slowdown that has occurred over the past few months.

Paper grades in particular seem to have been affected with reports of orders for OCC, news and pams and mixed paper not being made, or a very low price being requested by Chinese buyers. Where orders have been rejected, this is typically on the basis of “not this week, but next week” rather than a general determination not to buy.

Although this seems to have affected paper mostly, plastic hasn’t been immune with PET bottles in particular reported to be slow.

However, one source told SCM scrap-ex that “we can still ensure that the best quality material is being sold and getting the best price”. While another exporter said: “I am pulling my hair out. Mills have stopped buying in some cases, and slowed down in others.

“I don’t get the feeling that the market has crashed, but it is dropping. This isn’t 2008 as that didn’t last too long as we hit rock bottom then and it then took three months to recover. This has been more sustained but the prices have been coming down gradually. I’ve been offering material to people in China but not getting a reply on it, which says a lot about the market.”

The situation isn’t being helped by domestic demand as there is a glut of material around. Another source said: “We are getting more calls being offered material at the moment.”

Chinese demand is being suppressed by both less consumption from European economies and continued high shipping costs with containers typically around $1,400 to $1,500 at present. Domestic demand is also weaker in China due to successful government efforts to cool its own economy.

The current UK price for OCC is around £75 to £85 per tonne, down from £78 to £88 per tonne last month. News and pams have dropped to £95 to £115 per tonne from last month’s £100 to £120.

Natural PET bottles have fallen to £265 to £285 from £285 to £320 a month ago. HDPE bottles are down to £340 to £400 from £345 to £410 last month. LDPE 98/2 is at £260 to £300 from £265 to £310.

For more prices visit www.scrap-ex.com/prices

Category: Recycling
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