Colin Clarke’s fibre report: November 2021

Colin Clarke Winfibre
Colin Clarke, managing director, Winfibre UK

After high prices over recent months, it seems there is a correction going on currently.

Prices for OCC and mixed have been slowly coming down in recent weeks, with at least £20 to £30 coming off since the peak, and scope for even more to come off.


When I look at the global market, one key factor seems to be that the US market has come off quite a bit and prices are falling there. Both domestic US and Central/South America demand has fallen and mills there just don’t seem interested.

With less demand from South East Asia for China, it is clear that something has to give. European interest also seems to be waning, while there is little need for Chinese mills to buy Indian pulp either. 

Some Chinese mills are also taking maintenance downtime at the moment, especially as China is rationing energy at the moment. Mills are facing power cuts or planned rationing, but so too are the manufacturers they are supplying. This means less goods are being produced, and there is less demand for finished cardboard products.  

There is a holding pattern now as buyers want to wait and see where markets head before coming back in.

Until recently, mixed paper has held up well, but with the spread narrowing between it and OCC, there has also been some downward pressure on this grade in the last week or so. 

For both grades, peak season has ended as the Christmas rush is all but over, and material for that has long gone to Asia while Europe appeared to buy early. 

Indeed, with all the shipping and haulage issues, it seems that retailers and manufacturers have stocked up weeks ahead. Our data shows that October was very busy with retailers churning out more tonnage than last year, but November has eased off. 

However, we may see markets pick up again around Christmas when there might be some demand for material either side of Chinese New Year. 

Of course, haulage and shipping has been a constant challenge over recent months. While I wouldn’t say it has got back to normal, it is certainly the case that it has improved a little.

We’ve been able to get boxes, but it isn’t as easy as it was prior to the pandemic. 

One positive is that shipping rates have improved a little, while another is that the exchange rate has been beneficial. This has helped to provide some support to stop prices falling by even more, but the overall trend is downwards.

We should also remember that this has been a highly unusual time, and we have got used to high prices. But the long-term average is normally somewhere around £90 per tonne for OCC. Even if prices come down to this average, it still represents good value. 

Colin Clarke is managing director of WinFibre UK

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