The market for OCC grades has been extremely volatile over the last three months. The local 1.04 price fell around 70% in July, remained stable in August and soared more than 200% in September. Such huge price swings in the space of only three months have never been seen before. Panic could be one of the reasons behind this volatility: panic over buying at higher prices than is necessary; and panic over missing out on the raw material that is needed to feed machines.
Demand for finished products is not strong and so paper mills are reluctant to make major efforts to increase raw material prices even though domestic collections have been really low and yards are rather empty. The current situation in Spain regarding COVID does not permit any thoughts of an improvement in collections over the coming weeks or months.
Throughout the third quarter, the OCC export market saw prices that were higher than those prevailing domestically.
Deinking grades have shown the same trends as OCC but with less pronounced peaks. Local demand is exceeding supply and so Spain is becoming ever more dependent on France. White grades remained much more stable during the third quarter, with hardly any changes. However, many tissue mills cannot afford the prices offered by packaging mills, and they have decided to reduce consumption of higher white grades and replace them with virgin fibre.
Francisco J. Donoso
ALBA Servicios Verdes S.L. (ESP)
Country
Spain