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

June Market News


Going forward...

The world bank expects that the world economy will grow less strong than earlier predicted due to the lower pace of growth of big countries like the USA, Brazil, China, India and Russia. The growth of the global economy will show an increase of 2,8%, while in January still 3,2% growth was predicted.  The expectation for the world economic growth for next year 2015 is still unchanged at 3,4%.

The American economy world’s biggest, is expected to grow with 2,8% this year, in January it was still forecasted to increase with 3,4%. The Chinese economy world’s second largest, will increase this year with 7,6% in size while initially 7,7% was expected, Japan the third largest economy went down from 1,4 to 1,3%. The Brazilian economic growth expectation decreased from 2,4% to 1,5%, the Indian economy went down from 6,2% to 5,5%. The Russian economy will only grow in 2014 with 0,5% while the expectation was 2,2% for 2014. Last but not least Europe, the growth expectation stays unchanged at 1,1%.

The prices in the USA for OCC went down with $5 per ton in most regions for the third month in a row, wiping away the increase of $15-20 per ton early March. The main reason for the decline was a weak export demand. Last week the export prices in the USA for OCC went up, it seems that the bottom has been reached.

The Chinese market is less interested in European material, they prefer US OCC and OCC nearby like Japan, Australia and local.

In the territorial dispute between Vietnam and China after a Chinese oil rig in disputed waters, Vietnamese anti-China protest turned ugly on May 13. The officials in Hanoi have been trying to reassure foreign factory owners that the country is still a safe place to invest. The local government in Binh Duong province just north of Ho Chi Minh City, apologized.

Chinese paper based companies in Vietnam were low or not effected due to the protests.

In China Lee & Man will start up a new recycled containerboard machine of 400.000 mt at her mill in Chongqing (PM20).

According to the Chinese Paper Association, the paper and board output in 2013 dipped about 1.37% year-on-year to 101.1 million tons, consumption decreased by 2.65% to 97.82 million tons.

Tissue was one of the grades that was still growing in 2013, but the growth was slower than previous year. The production increased by 1.92% year-on-year to 7.95 million tons in 2013 consumption with 0.41% from 7.31 million tons to 7.34 million tons. Growth rates were 6.85% and 17.74% for output and 8.46% and 18.87% for consumption in 2012 and 2011.

The sector in confronting a serious overcapacity. Large tissue producers are pushing back start-ups of new machines. Hengan, APP China for example all delayed their expansion plans.

For the year 2015 a small 700.000 tons of new capacity will come on line, a big reduction from the previous plan of 1.82 million tons.

The overall expectation is that the global economy is at her lowest point of her down cycle. If we translate this to our industry we see especially in Europe that the additional sold tons of Pulp from South America melted like snow in the sun. The result is that prices for the better grades market in Europe will increase.
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