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Vecht 125 - 2911 ER - Nieuwerkerk aan den IJssel - The Netherlands 


September Market News


Both the emerging and the developed economies will still have economic adversity in the year 2015, a difficult economic climate, in which Europe will feel the pressure of the Russian embargo of agriculture products. The expected economic growth for the Eurozone is already adjusted downwards for next year due to the Ukraine crises as largest exporter of agriculture products to Russia.

In addition the low inflation is a worrying development in the Eurozone which can encourage the ECB to take aggressive measures. The Economic experts however expect that the monetary policy of the ECB will stay unchanged for the moment.

The growth expectation for the World Economy will be adjusted this year from 2,8% to 2,6%, while next year a total plus of 2,8% is expected, down with 0,1%.

For next year financial markets experts predict an appreciation of the dollar against the Euro due to better economic results in USA and expectation of increased interest rate in the USA. This could help the export from the Euro-zone.

In the USA the OCC price felt for the fourth time in six months with $5-10 per short ton for the domestic mills, export dropped with $10 per short ton. Mixed paper and ONP held on same levels. The Higher grades in general also kept unchanged. Since the March peak in US, OCC is down $35 on export to China and down $30 at US mills. US mills are well stocked.

The Chinese mill buyers are cutting back purchase volume by 50% over August, which were already cut from normal levels. China did not get much of Christmas production bump that would have resulted in higher demand for fiber. Now the season for Christmas production has passed, they continue to show healthy inventory level that will carry them through the month. In addition credit is tight due to government restrictions and finished product sales is low for all packaging grades. The mill situation in china is simply not good. In addition several Fuyang mills are facing bankruptcy.
 
Pulp substitutes increased with USD 10 per short ton, some mills are paying higher spot prices for direct deliveries. This even as bleached hardwood kraft market pulp spot prices have declined behind a major bleached eucalyptus kraft pulp capacity increase in Latin America. According to market experts the reason for the increase was a limited generation of the pulp substitutes versus a steady US mill demand.

In Europe export of OCC was mainly leaded by the 3 Chinese procurement companies where prices increased a bit last week. Of course the weaker Euro helped pricing on the export now being on the same level as domestic mills. Export out of Europe is still strongly focussed on the UK and less from the continent.

With the holidays being over and Autumn at the doorstep, an increase of generation is expected in addition the price is expected to drop a bit for OCC and mix paper in Europe, let see how it will evolve in our volatile market of recovered paper. 
 
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