Quarterly Report – April/May 2019

The reduction in Chinese import permits holds the key to the difficult scenario in Spain, as everywhere else. China is not buying either OCC or deinking grades, and so available volumes are exceeding domestic demand.

OCC prices have remained stable but are under heavy downward pressure whereas the deinking grades have seen a decline in value every month since last year. White grades are stable as demand is in balance with supply.

Spain has a deficit of recovered paper and so consumption is higher than collection. Therefore, it should not be too difficult to sell locally despite the problems in Asia. However, domestic mills have continued to import from major exporting neighbours France and Portugal as they have their own collection companies abroad and also regular contracts or arrangements with foreign suppliers. One of the consequences is that prices for OCC 1.04, for instance, are currently at their lowest since the market “crash” of late 2008 and early 2009.

Regarding the former Holmen Paper mill, International Paper is already producing and consuming at healthy levels of around 1000 tonnes per day but is focusing only on top-quality OCC grades. There has been no impact on the market as yet because the company had very high stocks of its own but, hopefully, it will contribute shortly to an improvement in the overall situation.