Chris Burton’s Fibre Market Report: December 2020

Chris Burton
IWPP commercial director Chris Burton

Many of us will be taking the opportunity to look back at 2020 and thinking, what a strange year.

It has been a year where Zoom calls have replaced face-to-face meetings and it really isn’t the same. I do hope that I can go and meet our suppliers and customers again in 2021.


Perversely from a waste paper perspective, I actually think 2020 has been a better year than any of us would have expected when we started it in January.

At that point, OCC was trading below £30 per tonne, and mixed was a pound if you were lucky. Some were having to pay a gate fee for mixed when previously they had received revenue for it.

In January and February, people were talking about mixed being a dying grade.

Clearly, Covid has had an influence on the market this year, but I remember having conversations in February that by Easter we could get to £50 per tonne for OCC. That was when we hadn’t realised the impact Covid would have, but it was clear the market was on an upward trajectory.

Countries such as Indonesia were happy to pay more for good quality material at this point, and this was providing competition in the market.

By the end of March, OCC was back above £50 per tonne, but where Covid did have an impact was the rocket booster provided by the first lockdown. Within a few weeks OCC was trading at £125 in early May due to European mills being desperate for fibre at that point. I remember people saying if you could run a machine on it, people would pay for it, even if it was a load of banana skins.

Prices began to slide after lockdown 1 as would have been expected. As we entered the warmer weather and cases began to slide, there was a sense of us returning to normal and people thought this might be all over by October.

What is important to remember though is that while they dropped rapidly in May and early June from that £125 high in early May, OCC never fell below £50 per tonne for the rest of the year. This means OCC has always been more than double, more often more than triple where it started 2020.

Indeed, from July, prices have mostly been on an upward trend as Covid cases returned and people got into the habit of online shopping. While never the biggest contributor of tonnage, the loss of hospitality material has also been felt since the introduction of the tiers and November lockdown.

Mixed has been the surprise of 2020 and has seen strong demand. Everyone wants mixed. News mills want soft mixed, deinking mills want mixed as do packaging mills. Especially in the latter part of the year, we have seen the price gap between OCC and mixed tighten, although it still remains short of its long-term average spread.

News & pam has had a largely stable year, although prices dropped during the first lockdown when newspaper consumption fell, but they recovered to where they had been after that.

Multi and SOW have had a mostly uneventful year too. When printers closed in lockdown 1, they were hit a bit and SOW had an oversupply at the start of the year. With restaurants and pubs closed at times, this has taken away some of the demand. But instead we have had an atypical year with mostly stable prices and not the peaks and troughs you’d expect to see.

For all fibre grades, December has been a quiet month with most trading at the end of November for the month due to all the uncertainty around Covid, Brexit and the impact of the upcoming China ban.

Looking into 2021, I don’t expect much to change in the early part of the year and I’m not expecting the post-Christmas surge as I think online shopping has meant MRFs have already absorbed quite a bit of the tonnage. Plus, there won’t be as much retail or hospitality tonnage as you would normally get over the festive period. I can’t see prices falling too much, or see any reason for them to jump up and demand will likely remain from our key export markets.

Let’s just hope that as the year goes on things get back to normal, any issues around Brexit begin to resolve themselves and we continue improving on quality so that we can keep our key markets happy.

With that, I’d like to wish you and your families a Merry Christmas and a Happy New Year, and I hope 2021 brings us the opportunity to network and socialise again. 

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