Chris Burton’s fibre report: May 2021

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Chris Burton

While we are seeing prices starting to fall for packaging grades, if you think back to January 2020, we are in a much better place than we were then.

At that time, prices were low and the market was in the doldrums, but now it feels like we are getting back to normal.

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Over the last couple of months, we’ve seen really high prices for packaging grades and now the market seems to be correcting itself.

But I’m confident that as lockdown eases and we start to return to normal, the second half of the year in the run-up to Christmas will be positive.

For the time being, I expect a lull in the market for the next six weeks or so and the market to be generally quiet.

Much also depends on haulage and shipping, which seems to have got harder again after easing in February and March. Availability continues to be an issue with the highest bidder typically winning out.

OCC

After recent highs, it is clear that OCC prices are falling now and I would expect them to come off more in the next few weeks.

While European mills are not exactly pushing back on orders at the moment, there is definitely less demand and this is helping the price to ease.

We are also seeing the terrible Covid situation in India, which has hit exports to there. With India supplying a lot of pulp to China, it will be interesting to see if this has any effect on the market.

With this in mind, it wouldn’t surprise me if we see prices in double figures before the end of this month.

Mixed

Mixed held up for a bit longer than OCC, but has started to come down too. However, I think the recovery we have seen with mixed will continue as mills seem to want it. I can’t see us going back to the dark days of early 2020 when prices were negative.

I expect mixed will continue to fall in line with OCC over the coming weeks, but will also track upwards when OCC recovers.

News & Pam

Prices have been high in recent weeks and look set to stay there for the time being as newsprint mills struggle to get hold of material. Much will depend on demand for finished product, as newspaper readership has been hit even harder during Covid, and that is a trend that looks set to continue.

Multi and SOW

Tissue mills have seen rising prices in recent weeks by about £10 per tonne after 12 to 18 months of stability. This seems to be because of rising demand for toilet roll as retail and hospitality re-open again, and more people are heading back into offices. I would expect this to continue, so would hope prices for these grades will remain at these higher levels.    

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