Second Quarter 2011

Rising inflation, increasing unemployment in the Western economies, Euro Sovereign debt crisis still unresolved, and its effect on Euro/Dollar rates, and decreased consumption have all had a noticeable effect on export volumes & prices.

 

Some of the leading European economies continued to show positive signs of growth which in turn has helped to promote demand for recovered fibre in Europe. However, the weak Euro economies continued to affect European consumption, leading to a slight reduction in collection of recovered fibre in Europe.

 

The Tsunami in Japan, continued to have an effect on Japanese exports to ASEAN countries, whilst the positive growth within the Asian economies (especially China & India),  continued to increase demand for exports.

 

Recovered fibre prices fluctuated greatly during the quarter, primarily affected by the Euro/Dollar rate, increasing demand for fibre, both within Europe as well as Asia, and reduced collection levels.

 

Freight rates in the quarter weakened slightly with the introduction of new capacities. However, rates are now at levels lower than seen in recent months and a correction is likely in the near future.

 

OCC prices for the quarter began at levels of USD235+ and rose during the last 3 months by USD10/15.

 

Similar trends were seen in Mixed Paper, with prices rising from USD227+ and during the quarter rose by USD5/10.

 

Stock levels of finished goods at the Asian paper mills looked to be below average levels seen previously.

 

Domestic collection levels have been gradually increasing which are now able to satisfy an increased level of recovered fibre demand for many of the countries in the region. However, imports of recovered fibre will continue to be sustained at or close to, current levels.

 

Demand from all the Asian countries, (China, India, Indonesia, Thailand, Vietnam, Taiwan & Korea) has continued to grow during the quarter. Demand for all recovered fibre grades (OCC, Mixed Paper, News & Pams, Office Paper, and HWS) has remained buoyant during the last 3 months.

 

We look forward in the second half of 2011 to a more stable Euro, improved collection levels and a market without too many fluctuations as has been a feature of the first half of this year.