Quarterly Report – September 2020

The reopening and revival of numerous sectors of the economy continued in July. The simultaneously hesitant improvement in consumption resulted in a very slight increase in the amount of recovered paper collected. In those federal states in which the holidays had already started, however, this was hardly noticeable because of a fall in household-related collection volumes. 

Throughout July, the domestic paper industry’s demand for recovered paper remained tentative. According to reports, mills’ order situation improved slightly for the brown grades in particular, which meant that they were able to deploy their overflowing stocks. The number of plant stoppages fell slightly when compared to June.

At the beginning of July, the paper industry reduced prices for the lower grades by around Euro 30-40 tonne. The medium and higher grades remained largely stable in terms of demand. Availability of suitable recovered paper exceeded demand in the tissue segment, and deinking prices fell slightly.

The August holiday period in Germany also brought a decrease in quantities of recovered paper. At the same time, many paper mills continued to produce and to increase their fibre demand. In addition, there was brisk demand from Asia for recovered paper grades suitable for export. Overall, recovered fibre suppliers were able to empty their warehouses almost completely, although there was no shortage on the market. Recovered paper from France, Belgium, the Netherlands and the UK poured into the west of Germany. This was supported by papermaking machines that went into production from the end of the month. As for prices, there was essentially a sideways movement that created stability. Only the tissue sector witnessed small, single-digit price drops.

Domestic recovered paper collection volumes increased slightly when the holidays ended in some federal states in September. Owing to ongoing short-time working and subdued consumption, however, collection volumes remained significantly below those of the same period last year. German mills ordered recovered paper continuously and in good quantities, and suppliers were able to fully satisfy this demand. At the same time, very clean recovered paper was also in great demand from South East Asia and India. In the growing shadow of their country’s ban on recovered paper imports from January 2021, Chinese buyers ordered even larger volumes. Overall demand for mixed paper and supermarket grades resulted in high, double-digit price increases in the first half of the month. Export activities decreased towards the end of September, prompting the paper industry to buy additional quantities at sometimes comparatively lower prices. Prices for available quantities of the deinking grades increased in the low double-digit Euro range whereas the medium grades remained stable. Prices for the higher grades fell slightly, and this was also the case for pulp.