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


March Market News

Spring time, a change of season?  

In the USA the OCC shoot up with the largest amount in two years with $15 to $25 in the US East and Southeast. The reason for the price move being mills short on stock and unable to gain supply quickly because of the cold weather across the US East Coast. The weather caused a slowdown in transportation as well as reduced generation. The supply is not just delayed but also simply disappeared. In some cases the supply reduced with 30% this is the reason local mills are desperate.

The increase by the domestic mills took place even while the Chinese demand was low. The export is faced with delays at port terminals and getting the space on vessels.

All are waiting for a new season, the spring however waiting is a difficult factor. 

At the West Coast of the USA where export dominates OCC prices hardly moved even more Chinese mills pushed hard to drop the OCC prices.

SOP increased with $10, the highest average since a year. The pulp substitutes increased minimum with $10.

In Europe the spring started early during this week with sunny weather after a mild winter. In line with the upcoming spring, the economy in Europe consistently improves, although it will take years for governments to change their deficits into surpluses.

This week SAICA announced the acquisition of the Turkish mill OMK, a manufacturer of corrugated cardboard. According to the Spanish mill the take-over is part of their strategy to increase the group’s footprint in the East of Europe.

In Europe the export is weak in price average Euro 113/mt FAS to the port depending on the country/region, making export not competitive compared with domestic prices being minimum Euro 10 or more higher.

The SF went up (between USD 100-200/40) in Europe with less space on the vessels making export quiet and weak besides their noncompetitive market prices.

The question is will China come back to purchase stronger? Or did we arrive really in a new season towards export to China? Who will stay, who will pull back?

The economy is China is as mentioned in our last newsletter in a different stage, the cycles of export are fundamentally changing in Europe, this has been proved by time and performance of the last years.

Whether Europe arrived in a new season with different business cycles is confirmed by time, but how will the cycles develop further? As always time will give the answers.
 
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