The remainder of 2014 is likely to remain tough for the recycled paper market, according to J&H Sales managing director Ranjit Baxi.
Writing the introduction to the latest BIR World Mirror for Recovered Paper, he warned that conditions are only likely to improve in 2015.
He wrote: “Currency volatility has also continued to play its part with both the euro and sterling maintaining their stronger position against the US dollar to make export pricing more challenging. The Indian rupee posted further losses, with weakness evident against all major currencies, but it may strengthen following the country’s election.
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“Following a period of stability, sea freight rates began to firm from mid-February, supported by a shortage of containers as well as vessel space – particularly as some ships omitted to call at northern European ports. By the end of the quarter, rate increase of some $300-500 per 40-foot container had been enforced.
“The Asian fibre market on the other hand, continued to weaken, and this was more noticeable after the Chinese New Year holidays. OCC prices for Asian main ports began the first quarter at $190+ per tonne, but ended it at lower levels of $175+. Mixed paper which satisfied quality specifications managed to hold its price within a small window, but demand was weaker. Prices began the first quarter at $165+ per tonne and closed it at around $160+.
“Demand for all other grades remained steady, albeit at lower price levels.
“With increasing domestic collections in most Asian countries, the rate of growth in demand and prices for the rest of the year will continue to exert pressure on exports to Asia. 2014 seems to be the culmination of recent challenging years, with the market looking at more positive growth from 2015 onwards.”