For us in the UK, there is light at the end of the tunnel that we may soon return to normality.
While that date has been pushed back from this week to 19 July, it still isn’t far away and of course, we are living more normal lives than we were even a few months ago.
But for other countries, the picture is very different, and that is likely to continue to have an influence on the recovered fibre market for the foreseeable future.
In recent weeks, we have seen heat coming back into the market and that looks set to remain for a few weeks at least due to global dynamics and demand from certain regions.
For the UK, we have seen strong demand as a consequence of Covid from Europe, especially for mixed, and India came back into the market in June briefly and then left again – I expect India will do the same in July at least.
In the US market, Covid has meant that material has been wanted from there in Mexico and Brazil causing greater competition and increased prices.
As a result, South East Asian mills that are owned by Chinese mill groups like our own, are interested in UK fibre as this is currently cheaper than that available from North America. Again, this adds to the demand.
However, it is also the case that there is not enough supply to feed all of this demand, and market prices keep rising.
But Covid is also having an impact on shipping. There is significant congestion at Yantian, Shekou and Nansha ports in China following Covid cases in the region, that is leading to poor port processing capability, and haulage issues to and from those ports.
Container availability is getting harder and shipping prices may rise or at best stay where they are.
We are also seeing further Covid waves in South East Asia following on from the well known spike in cases seen in India in recent months.
It seems at the moment, we are in a time of extremes for all of the factors that influence the market as a result of Covid. How these extremes balance out will be what affects market prices over the coming months.
Colin Clarke is managing director of Winfibre UK
