Fourth Quarter 2009 Report

The news that most European economies were emerging from Recession and that Global trade was growing, gave us, in the Recycling Industry, a much needed boost.

Sustained and gradually increasing exports contributed towards the upturn in the World’s economies.

Continued positive growth of both the Chinese as well as the Indian economies helped to maintain export levels of Recovered Fibre. China’s imports of Recovered Fibre during 2009 is expected to surpass the level seen in 2008. China’s imports for 2009 are projected to exceed 26.5 million tonnes.

During the 4th quarter increasing freight and haulage rates, Dollar volatility, low collection levels, hampered by a colder Winter, all contributed to an increase in Fibre export prices.

Both domestic mills & exporters were forced to compete, with procurement becoming tight, as volumes reduced and demand increased, leading to a squeeze in their margins.

Recovered Fibre prices for export were reasonably steady during the first 2 months of the quarter, but in the last 3 weeks of 2009, we experienced a very sharp increase in all grades. The primary reason for this was that the stock levels at the Asian mills were running low with their order books remaining strong.

OCC in October started around USD150 moving to USD160 in November and USD175 in early December. However, by the end of the year they were touching USD195+, and are still rising.

Similarly for Mixed Paper, the quarter started at USD145, rising to USD150 in November & USD165 in early December. By the end of the year, this had risen to more than USD177, and continues to strengthen.

Demand for News & Pams, Magazines, Sorted Office Paper, Coated Book Stock, and other similar grades also saw increasing demand supported with price increases.

Inspection procedures for exports to Indonesia were formally announced, for all arrivals after Jan 1st 2010, with the list of approved Surveyors advised.

Demand from India & other Asian countries, Indonesia, Thailand, Korea, Vietnam, Taiwan, remained strong in the 4th quarter.

Having successfully negotiated a challenging 2009, and with the Chinese New Year fast approaching, exporters will be looking for new Fibre demand levels from China, once the Mills return after their break, around mid-February 2010.