Norway-based waste management company Geminor has said that the next few months are going to be tough for recovered fibre prices.
The company, which also operates in other parts of Scandinavia, Finland, Germany, France, Poland, Italy and UK, said that each of the German mills reduced buying by a total of 15% in August compared to normal, with each reducing consumption by between 20,000 to 50,000 tonnes.
They had also brought forward or extended their necessary inspection and shutdown periods.
This was due to reduced demand for finished goods, as well as higher energy prices.
Geminor German senior account & development manager Yasser Ismail said: “The European economy is facing an extraordinary situation with inflation running wild, a war in Ukraine, and prolonged shipping capacity issues.
“Naturally, this also affects the paper industry, and two factors in particular are creating these sudden challenges: a dramatic fall in general consumption, and a tripling of energy prices.
“At the moment, both recovered and new paper stocks are full to the brim. This has a profound effect on the current recovered paper market prices.
“Market price-related contracts for mixed paper and OCC fractions have recently fallen by €30 to €80 per tonne, or close to 25% from July to August.”
He added that demand from the German automotive and aerospace industries for packaging has reduced by 17%. He also warned that some German recovered fibre mills may see production drop by 50% if gas is rationed in Germany over the winter.
In addition, he noted that the Asian export market is currently “silent” with container challenges also being reported.