Are Waste Prices Sustainable?
15-04-2011

 

It is fortunate that global recovered papers price increases have offset the recent cost increases for ocean freight and the weak US dollar. From Australia, ex factory prices have held up for March and April, mainly due to Asian demand and uncertainty with exports from Japan, in relation to shipping availability and some caution with radiation content which has uncertain entry into China.
 
With the Chinese May holiday period approaching, most mills have been conservative with their buying, knowing that there is an increasing surplus available from Japan, together with a reported poor OCC quality shipment from USA which has been discounted to move.
 
European prices for office papers have been weakening, possibly due to poorer quality, although this is not yet being reflected in Asian procurement, especially into China. The weakening US dollar is making some pulp prices cheaper to some destinations. This has narrowed the price incentive gap between utilising deinked pulp and virgin pulp for some end uses, which is marginally favouring virgin pulp.
 
From Australia, ocean freight rates continue to climb ($200-400/FEU) to most destinations, with possibly only China to retain some reasonable freight rates. Although with high fuel prices, these may creep up with bunker surcharges.
 
The bottom line is that from Australia, the strengthening currency especially against the weak USD, is coming straight off the bottom line and with fuel increase, transport surcharges are back again and beginning to be felt.