Packaging giant Mondi has said that it has seen a rise in exports of containerboard to China in its interim results.
Reporting a before tax profit of €466 million (£419 million) for the first half of its financial year, the company noted that recycled paper input costs were lower in the period compared to the same time last year.
In its results Mondi said: “Containerboard sales volumes were up on the comparable prior year period while Corrugated Solutions achieved overall volume growth of 4% in the first half of the year, with strong volumes in our core markets of Central and Eastern Europe, testament to our innovative product portfolio and customer service offering.
“Demand was good as we started the year, further strengthening in March and early April as lockdown measures were implemented in Europe, before softening towards the end of the first half. The height of the lockdown period in Europe was characterised by strong demand in fast moving consumer goods and e-commerce coupled with value chain stocking, while industrial end-uses typically came under pressure.
“Encouragingly, we are seeing a pick-up in containerboard exports to China, mitigating the lower demand in European markets going into the second half of the year.
“Overall, average selling prices during the first half were down on the prior year period as well as sequentially. Average benchmark European selling prices for unbleached kraftliner were down 15% on the comparable prior year period and 5% on the second half
of 2019, while average benchmark European selling prices for recycled containerboard were down 16% on the first half of 2019, and 5% sequentially. Benchmark white top kraftliner and semi-chemical fluting prices were down 8% to 9% on the comparable year
and 3% to 5% on the preceding six month period.
“Input costs were on average lower year-on-year, with lower wood, energy and chemical costs.
“Paper for recycling costs were also lower in the first half of the year versus the comparable prior year period, although pricing increased sharply during the second
quarter as a result of disruption in collection networks, peaking in June.
“Prices have since declined, as collection systems returned to normal operation, and they are today 9% higher compared to the average of the first half of the year.
“Mondi consumes annually approximately 1.3 million tonnes of paper for recycling. Cash fixed costs were slightly lower with higher personnel costs offset by lower maintenance shuts and cost control initiatives.
“Planned maintenance shuts at all corrugated packaging mills are scheduled for the second half of the year.”
Although originally founded in South Africa, Mondi has its headquarters in the UK.