Thursday, November 12, 2009

Recovered Paper - Updates 12/11/09

Date : 12/11/2009

News on fire at a recovered paper warehouse of a major containerboard mill in China had raised concerned on prices of recovered paper. Many recovered packers had started to stock up or offered higher prices in anticipation of shortage in supply.

Similarly, major paper mills in Asian countries had started to watch closely at prices of recovered paper as many are worried that price will escalate to a higher level.

As a result, many are expecting the following scenarios.

a. Prices of finished product (containerboard) will raise due to cost pressure as a result of sudden raise in recovered paper prices.

b. Some Asian mills who are not buying (in negotiation with foreign packers) at current price level may starts to buy again. This may caused a snow ball in demand for recovered paper. Thus, prices of recovered paper may shot up again.

Nevertheless, if Asian mills are having sufficient recovered paper inventory and low demand season for packaging goods, the above will not materialise. It is still too early to say but let see in the next couple of days.

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