Demand for OCC and mixed still remains high in both the UK and export as volumes generated at source remain keen and mill consumption remains stable. The weather will have a short term effect on demand that could result in prices increasing slightly again as deliveries are disrupted and collections from source also affected in the same way. 

Demand for quality recovered paper in the UK and Europe remains high in this sector, however newsprint manufacturing over capacity coupled with reduced supply is resulting in newsprint mills across the board struggle to make money. It will very much be survival of the fittest in this sector going forward – we have already seen one newsprint mill in the UK go under due to the low price of newsprint against the high price waste paper, energy and transport and it would not be surprising to see other mills either in the UK or elsewhere in Europe close plants or at least reduce capacity – this is actually required at the moment to bring all round equilibrium in this area, so waste paper prices cool and newsprint prices can be increased.

Prospects in this area as always buck the trend from the other sectors and while waste prices have increased over 50% in 2010, the producers always seem to be able to simply pass these increases on to their customers as demand in this sector for tissue products is always growing steadily. There is more investment in this sector on an ongoing basis than any other as the long – term prospects here are more attractive. Prices have cooled off in the last few weeks by £5 – £10 p ton, however with generated volumes still low with printers and offices being quieter than normal, we don’t expect to see prices fall much in the first quarter of 2011.