October market update – price and allocation implications:

To all suppliers:

Even in the short space of time between our previous market update last week, there have been further market developments that will affect all suppliers in terms of both material prices and movement of material from yards.

Packaging (Mixed / OCC):

As of writing this, the price of OCC on the export market, has fallen again, with cumulative price drops of about £40 - £50 p ton over the last three weeks.

Material for export is still moving, however for UK mill allocations, stock yards are full or getting full therefore allocations to suppliers are much reduced also. This in turn will further lead to excess material being offered onto the export market which in theory, should push the export prices down further – certainly a vicious circle for the OCC market right now.

Material will move – but will move much slower and at much reduced prices.

For mixed paper, many buyers have put the kibosh on any old orders and are simply refusing to buy any mixed paper, especially material from co-mingle sources. Orders rather than prices will be the main currency of value for this grade for the coming weeks, however again, expect quality issues to become prevalent especially if the market continues to weaken.

De-ink:

While prices have not fallen quite as sharply for these grades, UK stock yards are full so we anticipate a massive price correction in this sector for November, possibly up to £50 p ton on top of the reduction of £15 p ton for October.

Again, material will move but slowly as mills reduce allocations to regular suppliers, while being offered new tonnages from other sources.

Export orders are few and far between also, however these are inherently risky due to the high probability that even good quality material will be claimed.

Tissue:

Prices have crept down £5 - £10 per ton per week since mid October, however we expect a £20 p ton reduction for November on top of these aforementioned reductions. This is compounded by a vastly reduced order allocation for all tissue mills for November, with some mills indicating a reduction in received volumes by as much as 75%.

This is all being driven by a vast reduction in pulp prices, which has caused mills to use pulp for finished paper production rather than recovered paper.

For the coming few weeks, we expect prices to be corrected dramatically and mill allocations to be reduced also – this will have an effect on our ability to collect material as promptly as we would normally like and will also probably mean we will have to put maximum limits on the amount of material we would normally purchase also, especially on grades such as office papers and over issue news. We apologise in advance for any service issues that may be experienced during this period of market uncertainty, however we will as always look to assist our loyal suppliers in any way we can.

If you have any questions about the markets or any other aspect of this article, please do not hesitate to contact Stephen Duffy at 01355 524 215

Stephen Duffy
Managing Director
Highlander International Recycling