Colin Clarke recovered fibre report: November 2022


We can’t look at the UK market in isolation.

Instead, we also have to consider domestic markets in the European Union and United States. 


In Europe, there are the issues around electricity and gas shortages and high fuel prices, mill downtime and crucially a lack of demand for packaging. This is leading to lower prices.

Then in the United States, domestic mills there have very good inventories, but like Europe generation of material is falling and less packaging is being consumed. Again, prices there are low, and mixed is even at gate fee levels now. 

Recently, the UK has been a favourable place to buy from for Asia due to good shipping rates and the benefit of the PERN making us attractive.

India has also come back into the market after not buying for a while as the economics of making pulp and sending it back to China became viable again. 

But if the PERN value were to fall, then that would take away some of the benefit we currently have.

As we get towards the end of the year, there is still a great deal of potential for markets to be volatile. Prices have not fallen as much as some might have expected, but they still could. Yet if the PERN were to rise further, that could continue to make the UK the most favoured source of recovered fibre for Asia. 

European and US markets look like they will have low prices in the near future, so we need these favourable PERN prices and attractive shipping prices to remain.

The value of the pound compared to the dollar on the FX markets has also been good for the deep sea market, and while it has risen a bit in the last week or so, that has had a dampening effect on material prices going higher rather than causing them to fall. However, the pound against the euro hasn’t moved lower to the same extent as it did with the dollar and the same benefit hasn’t been there for trade into Europe. 

This time of year is normally busy in the run-up to Christmas, but that hasn’t been the case in 2022. However, material has kept moving and prices have been good thanks to the PERN effect.

We also have Chinese New Year not long after Christmas. While mills in Malaysia and Vietnam have some Chinese workers, it shouldn’t affect them too much. We also wouldn’t expect it to create as much shipping disruption as it has done in previous years due to the lack of global trade making more capacity available. 

For the time being, the markets remain good for OCC and good quality material has willing buyers in Asia. Mixed is also moving to various destinations, although not at the same high prices as seen earlier in the year.

This remains a volatile market, and sentiment can change easily. We have to keep an eye on global markets, because that will mean price changes here if conditions change in key markets abroad. 

Colin Clarke is managing director of Winfibre UK