BIR paper division president and Paprec chief executive Jean-Luc Petithuguenin is expecting the second half of 2021 to be strong for recovered fibre.
Writing in the latest BIR World Mirror for Recovered Paper, he said that the market is currently performing “very well”.
He added: “The European lower-grade market is in a healthy position, supported by packaging and e-commerce. The sales price of reels is set to increase again on August 1. Our industry’s customers are facing a demand never seen before and are struggling to meet the very strong requirement for packaging. Paper mills must choose when accepting orders as they are unable to deliver to everyone.
“Mills’ top priority is to receive recovered fibre and they will know how to adapt purchasing prices where necessary to counter large exports. Demand from Asia is strong at high prices but hampered by the lack of availability of containers and vessel space. The situation is gradually improving but freight remains extremely expensive.
“If collection were to settle down slightly this summer, pressure could increase on the availability of materials. The market would no doubt be forced to move, especially if Asian demand continues to strengthen pending a return of the Indian market. Turkey is also starting up new machines which will increase the country’s import requirements. For the moment, all lights are on green.”
He said that for high grade material the market is stable at present with collection volumes average but demand from paper mills was calm.
For medium grades, newsprint makers were finding a market lacking in deinking material and collection volumes were poor. Tissue grades were also finding it hard to pick up material.
Germany’s Reinhold Schmidt from Recycling Karla Schmidt said that mills were continuing to order in large volumes, and continuing to import from neighbouring countries to meet demand. However, easing of Covid restrictions in Germany was making more local material available.
Turkey’s Ekrem Demircioglu added that his country was seeing greater investment in mill capacity following the success of previous months, and Kipas Holding is expecting its fluting and liner mill to be open in the third quarter of this year.
However, he warned that with expectations of recovered paper usage by Turkish mills likely to be 5 million tonnes in 2021, and domestic collections projected to be 3 million tonnes, there could be issues by the final quarter for mills with high capacities that are subject to the country’s 50% of total production quota.
But for now, domestic Turkish collections are expected to ease as people celebrate Eid this month.