UK Recovered Fibre Prices Collapse

Since November last year, there has been a steady rise in the UK price of recovered fibre for export and domestic use. By March 2017, the price of Mixed grades had risen from £75 per tonne to over £100 per tonne (average ex works price), while OCC increased from £90 to reach £120 plus per tonne. Several factors were involved in the steadily rising prices – the major factor being reduced export container capacity and the significant increase of container prices from the shipping lines. By mid March, market commentators were suggesting that recovered fibre prices were unsustainable – particularly for exports. Chinese mills were not running at full capacity and were favouring US imports rather than from Europe.

Monday 3rd April was the first day of trading this month and it became evident that UK prices (and export demand) had collapsed. Putting a brave face on the situation, some commentators claimed it was just a price correction after unsustainable rises over the last four months. But, with early April prices at £50-60 per tonne for Mixed papers (less for export in some cases) and £80-88 per tonne for OCC, combined with quiet export demand, some processors said that the market had totally overheated and the April price adjustment reflects the worst price collapse in five years.

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