There is no positive news from any region for August apart from Indonesia’s recommencement of their normal fiber import demand for post Ramadan deliveries from next week. This will provide some stability prior to early October when China’s golden holidays affect September shipments.
Chinese inventories are reported acceptable for waste paper and distressed tonnage has been absorbed. However, the same cannot be said for pulp stock and prices which corrected further this week by $50 per tonne. The gap between escalating pulp prices and finished product became unviable. Consequently, we can expect more price erosion, probably until October, when pulp prices should stabilise. In the interim, buyers will remain difficult to find for higher value pulp substitutes such as HWS, SWS and SWL. Mid grade prices for CBS and SOP1 are not expected to be as badly affected, when generation is not strong and deinking demand continues to grow from tissue mills.
Demand for mechanical (Publishing) grades have been slow as many Asian mills remain overstocked with weaker demand. Declining quality remains an issue for all mills who are receiving less Newspapers within ONP definitions, causing deinking and sorting difficulties from outdated MRFs.
Ocean freight rates from Europe and America are either steady or weakening as export volumes decrease. Equipment shortages are also disappearing. From Australasia, major consortiums are endeavouring to leverage rates up with new OTHC and DTHC charges, congestion and including any other contrived fees. Whilst general freight increases are considered justifiable, shippers are getting fed up with additional charges and contract uncertainty and welcome new lines coming into Australia that may bring some reality back into ocean freight rates.