Recovered Paper Exports Remain Bullish

March 2010 quarter export data was better than expected with only a slight reduction from a record December 09 quarter, which if consistent, is heading for a record 1.5 million tonnes for the year. Although data for the consumption of paper and board remains inaccurate, we do recognise that the cake has shrunk due to the recession, with the evidence of increasing on-line advertising resulting in a continuous shrinking affect on woodfree papers and newsprint.

The fact that OCC exports may have doubled compared to last year, due to the high price levels, means that there is sufficient unbleached fibre nationally for Amcor's Botany PM9 if they can attract suppliers. Interestingly, virgin Kraft liner board increased from 55,000 to 90,000 tonnes for the same period which may indicate a reduction in domestic demand and/or over capacity.

The export decrease in Other papers ( Mixed ) as well as mechanical and bleached may also indicate a reduction of materials going through MRFs. Visually MRF News grade looks more and more like office mixed. Such resemblance only suitable for offshore resorting, a positive sort of newsprint, or, a return to source separation.

Printers are suffering which can account for Bleached papers. With a historical slow second quarter, data comparisons will be interesting in June.