BIR World Mirror on Recovered Paper / Quarterly Report - January 2017

Ranjit Baxi, J&H Sales International Ltd

International Markets with a focus on Asia

Global economies are continuing to grow at a rather slow pace, with Europe achieving just over 1.2% while the Chinese economy is still maintaining its projected growth of 6.5% and India’s GDP is rising at a rate of 7.5%.

Overall demand levels appeared to firm in the final three months of 2016 when compared to the previous three quarters, pointing towards increasing global demand for fibre. With the approach of the US election, there was also volatility in the currency market, with a weakening of the US dollar and the Euro continuing on its softening trend following the Brexit vote.

The Hanjin Shipping bankruptcy, the realigning of shipping alliances and the possibility of mergers have greatly affected both availability of containers and shipping space, resulting in sea freight rate increases and delays to shipments during last year’s final quarter. Exporters are likely to be faced with increasing freight rates going into 2017.

Export prices firmed during the fourth quarter, benefitting both from increasing demand and weakening currencies. Following the holidays in the third quarter, collection levels also increased and so enabled more fibre to be exported. Domestic demand levels improved, as did European mill prices.

With increasing collections within Asia, an increasing number of the continent’s mills preferred to use larger volumes of domestic fibre because it was cheaper and helped them to deliver against prevailing weak market prices for finished goods.

OCC prices continued to strengthen during the fourth quarter, having started October at US$ 170+ per tonne (...)

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