Market Volatility in Recovered Paper: A Growing Concern for the Paper Tube Industry

Over the past two months, the recovered paper market—particularly for grade 1.04 (supermarket paper and board)—has undergone marked volatility across Europe. At Just Paper Tubes Ltd, we are increasingly concerned by the scale and speed of recent changes, and the implications these shifts are having on both the availability of raw materials and the stability of pricing across our supply chain.

Supply Pressures Mounting Across Europe

One of the primary concerns is the tightening of supply across key European markets. Since mid-February, collection volumes of recovered paper have declined noticeably, with March and April characterised by particularly low intake levels from commercial and industrial sources. This trend has been seen in Germany, Italy, Poland and increasingly the UK.

In Germany, market participants reported a notable reduction in volumes available to mills, triggering significant month-on-month price increases in March. This shortage was mirrored in Italy, where domestic mills and exporters alike competed for diminishing material, pushing the market upward. The situation in Poland has been especially stark: after several months of depressed prices, the market shifted abruptly, driven by a sharp drop in supply that began in February and escalated throughout March.

France also saw a sharp rise in prices for bulk recovered paper grades, largely due to exporters driving demand to the Far East. As a result, domestic buyers were forced to increase their offers to retain material, thereby raising the floor of the market. These supply issues have had a domino effect, with reduced availability fuelling a more speculative and uncertain trading environment.

Price Instability and Its Operational Impact

This constrained supply has had an unsurprising knock-on effect on prices. While we avoid referencing exact figures, we can confirm that percentage increases since early February have been significant—particularly in March, where multiple European markets experienced month-on-month jumps well above what would be considered manageable or predictable.

These rapid changes create a dual pressure for manufacturers like ourselves. On the one hand, the direct increase in the cost of recovered paper affects our input costs, squeezing margins on existing contracts and creating challenges in pricing future work with any certainty. On the other hand, the unreliability of supply can delay production schedules, create gaps in material planning, and ultimately put at risk our ability to service customers on time.

The volatility is made worse by the speculative nature of the market at present. Traders are reacting quickly to perceived shortages, further fuelling upward pressure on prices. This creates a vicious cycle where mills and converters alike are being drawn into competitive buying situations, simply to maintain continuity of supply.

In the UK, the effects have been compounded by the export of more than half the country’s recovered paper output, much of it destined for mills in continental Europe and Asia. This dynamic means domestic buyers must compete with international demand, even as local availability diminishes. The result is a UK market that is not only impacted by local collection issues but also increasingly exposed to pricing pressures from abroad.

Long-Term Risks to Stability

While it is true that the recovered paper market has always been cyclical, the current combination of factors—diminished supply due to poor economic performance in Europe, strong foreign demand, speculative buying, and regulatory shifts such as the EU’s Packaging and Packaging Waste Regulation—has created a particularly volatile environment.

The ability to plan with confidence has been severely curtailed. Budgeting for raw materials, setting prices for customers, and managing stock levels have all become significantly more difficult. With further price movements likely in the short term, manufacturers and converters are left absorbing unexpected costs or having difficult conversations about surcharges and delayed fulfilment.

Closing Thoughts

At Just Paper Tubes, we have always prided ourselves on delivering consistency, value and reliability. However, the current state of the recovered paper market is testing the limits of predictability in ways we have not experienced in recent years. We will continue to provide updates as the market evolves and remain available to answer any questions about how these developments may affect specific orders or supply arrangements.