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Paper Mills should book materials (OCC) at present with the assurance of delivery by April End; By May, Market has to come down because of European Material

-Shipping Lines will be adding Fuel Surcharge on Freights by 15 to 20% to cover up their loss.
 -Waste Paper price will be touching $450 MT levels which is most probable by the year-end.

Stallion Overseas is a prominent indentor company in the field of recycled paper such as brown grade, white grade, and stock lots, was incorporated by Mr. Bhavesh Rajput in 2010, located in Surat, Gujarat, India that is nearby to Hazira port. Stallion is importing recycled paper from countries like the USA, Canada, UK, Spain, Italy, Greece, Germany, Bulgaria, Saudi Arabia, Kuwait, and Jordan, and would like to extend our reach around the world. The below article on waste paper (OCC) scenario has been written by Mr. Bhavesh Rajput, views are personnel based on the present market conditions.

New Delhi | 17th March 2022 | The Pulp and Paper Times

Wastepaper is the prime raw material for Indian Paper Mills. Paper can be recycled for at least 5 to 6 times before it loses its strength and becomes non-recyclable. Above 600 mills across India uses imported wastepaper for their regular production. About 200 new Mills are in commission which will be adding up the further volume for imports.

The Indian Paper Industry is going through the worst market crisis ever built up. There are majorly 3 factors that are driving the market crazy.

First – Buying Pattern:

The Wrong Buying Pattern of Indian Paper Mills due to lack of intelligence. Most of the Indian Paper Mills follow the big suppliers calls, who originally give falls prediction to square off their positions or to hold their material to gain exceptional margins. In the last 3 years I have closely seen that every time the price has jumped up, before that there was a common phenomena that Market is about to Crash which kept Paper Mills away from buying. When the price swing to other side, they became the scapegoat and bite the losses of covering the material at higher price. This is almost every mill's story and being an indentor we can never make them understand their mistakes. One should be an Average Buyer on all time. You loose a good supply when you keep switching on and off your buying requirements. At present there is a huge crisis going on. I don't know how many mills can actually keep the show running by May Mid to July End as I don't see that they have many opportunities to keep their supply chain book filled with regular imports.

Second – Logistics:

Logistics killed the trade more than the suppliers. You have to understand what is First Priority. Waste or Finish and Fine Goods. Due to the Covid Crisis, entire focus of global supply chain moved from Recycling to Prime Goods. Due to less availability of Vessel Fleet, Equipment and Truckers. We heard how Truck Drivers went on Honking at the door of Canadian Prime Minister when USA denied their entry. If you don't have Truckers, who will move your cargo from one place to other? This was the story at most of the place that due to non movement of truckers, lower man power, covid norms and restrictions, entire supply chain got heavily impacted. Now waste paper is the least priority for this supply chain part. Due to its value, its worth and its usage. So certainly the focus of Lines were high towards prime goods as they minted cash on higher freights. Other side of the story is also interesting. Europe was the main source of procurement of Waste Paper for Indian Mills. Almost 40% Waste was supplied by EU Countries to India before the Ban. Now the demand also got increased due to additional mills commissioned. Then came the Logistics Crisis.

Today if you ask for Waste Paper Offer for Hazira / Pipavav / Tuticorin / Chennai / Ennore / Vizag / Kolkata, most of the shippers will either not respond to your mails or messages or they will simply send a smiley as they think you must be aware you are asking the Impossible. Shipping Lines have completely sidelined Indian Destinations and Indian Priorities. Earlier Maersk / MSC / Hapag / CMA used to fight for Indian business by lowering their rates / destination cost but today they don't actually seems bothered. To some extent, this was again due to Indian Mills wrong working pattern. If I have to explain, Like, Earlier when Indian Mills have 14 days detention demmurage free period at destination, they never bothered to take any initiative to release the cargo within first 10 days. They didn't even bothered to retire the documents. This kept building the backlogs and slow movement of Equipment for Indian Destinations. This made Shipping Lines to stop issuing bookings for Indian Destinations. Slowly Lines decreased the Free Days from 14 to today 4 or sometimes 6 days only in most of the cases and now Every Mills behaves as if they are on their toes and they clear the cargo within that timeframe. So it was technically never impossible, but Mills are like they own the Shipping Line and today they are getting returns of their own deeds.

Third - The Crude, Russia - Ukraine and Covid:

Just a few days back, I got the news that now all across the globe, Lines have informed customers that they will be adding Fuel Surcharge on Freights by 15 to 20% to cover up their loss on Crude Price Jump. Whether this is War Effect / Covid Crisis or a set plan, but at the end, the end user is going to get crushed in this three sided fight.

Future Trend:

As per me, I see that Europe will be open by 20th April, by that time, OCC Price will be 400 or plus levels for American Grades. If so happens which I am predicting, Mills will be again going for a buying spree from Europe as there will be several offers in the market. However, by Mid May or End May, Market has to come down because European Material will be all across. Also since decades, May and June has always been a month of downfall for Paper Prices. However, as I said in the beginning, Paper Mills are little too smart in buying, so as soon they will see market is open and staying hungry for so long, they will start booking heavy by April. By the time when material will land, they will incur a loss in Import which is a common thing in India. For the smart players, they should book materials at present with the assurance of delivery by April End. Mills should be away from buying heavy orders until June mid and they should only do small buying to keep the wheel rolling. Come June and they must cover up with the maximum capacity so that they don't end up crying over prices of Waste Paper touching 450 levels which is most probable by the year end as per me.

Above are my personal opinions and views and readers must take their own decisions on buying or selling of wastepaper through their own best findings. I do not take any responsibility on their choices

Web Title: Paper Mills should book materials OCC at present with the assurance of delivery by April End By May Market has to come down because of European Material

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