The excess of old corrugated containers (OCC) tonnage available for export from Europe and the USA has continued to weigh on the Asian market, driving prices for brown grades down to new lows.

European OCC 95/5 levels have dropped $20/tonne over the past two weeks and clocked in at $115-130/tonne in Southeast Asia (SEA).

A Japanese trader said that prices for recycled fluting exports from Japan to China, South Korea, and Taiwan have fallen to an unprecedented low of $300-310/tonne and business remains lukewarm.

That includes Malaysia and Indonesia, which require pre-shipment inspections in the countries of origin for inbound recovered paper cargoes.

Sellers have been willing to absorb the additional costs of $5-15/tonne for those checks and for the transshipment of cargos destined for Indonesia via Port Klang in Malaysia or Singapore.

The depreciation of the euro and the British pound against the US dollar helped cushion European sellers against the impact of the lower prices, as did a decrease in ocean freight rate.

In India, European OCC 95/5 is priced around $135/tonne.

Sources indicated that Indian clients are seeking price cuts whilst reducing volumes in the run-up to the big Hindu festival month of October.

With European OCC imports much cheaper than locally collected OCC in SEA - priced around $160/tonne in countries such as Indonesia, Thailand, and Vietnam - mills have stepped up purchases of European premium tonnage.

As large volumes are readily available, big mills in the region have reportedly made considerable orders for shipments scheduled to arrive over the next few months, until January next year.

Small and medium-sized plants have also taken the opportunity to build up their OCC inventories.

However, China’s muted demand for packaging materials and recycled pulp from other Asian countries has kept SEA customers on their toes.

Contacts said there have been no sign of recovery in the Chinese packaging market.

Vendors have offered recycled pulp manufactured in Taiwan, SEA, or India for as little as $310/tonne in China, but buyers there are still not interested.

A Japanese trader said that prices for recycled fluting exports from Japan to China, South Korea, and Taiwan have fallen to an unprecedented low of $300-310/tonne and business remains lukewarm.

US OCC levels slip: The erosion of European OCC prices has rippled through to US brown grades. Prices for US double-sorted OCC (DS OCC 12) have continued to fall, down to $130/tonne in Taiwan and $140-160/tonne in most of SEA besides Malaysia and Indonesia.

The premium US brown grade is fetching $160-170/tonne in Malaysia, Indonesia, and India. While buyers are seeking the bottom of the grade’s pricing, a major US supplier pointed out that collections of US DS OCC 12 from supermarkets and other commercial outlets have been in decline over the past few months.

The contact said the collection of the premium grade has seen a sharp drop of 60%, because US consumers are cutting back on spending.

On the other hand, US mills are taking downtime this month and next, and so have cut intake of the main feedstock OCC 11 substantially. The surplus has now been offloaded to the Asian market.

As a result, prices for benchmark US OCC 11 assessed this week in Taiwan and SEA have declined $10-15/tonne to $125-150/tonne.

In India, the grade fetches $150-155/tonne.

Japanese OCC has closed at $155-165/tonne, with tonnage mainly sold in Taiwan and Vietnam. The sharp depreciation of Japanese yen had the potential to make Japanese suppliers cut dollar prices more for OCC exports, but restricted availability prevented that, said a major Japanese vendor.

Mixed paper falls: Mills in SEA import mixed paper for manufacturing recycled fluting and duplex board.

Prices for standard mixed paper imports from the USA have fallen to $85-95/tonne in SEA and India.

Premium mixed paper from the USA and Europe is fetching $120-125/tonne. Suppliers said premium mixed paper requires re-sorting at plants via machinery and labor.

They indicated that the low pricing has given no incentive for suppliers to do the additional work, and will force them to stop processing the grade.

A major recycler in Europe has pointed to selling mixed paper as biomass fuel as a possible solution.