The volatility seen on the recovered paper markets in Continental Europe fully reached the UK by mid-March. Prior to that, the market had been balanced: As many paper producers from Europe were avoiding British recovered paper due to higher prices early in the month, most volumes had instead been heading to Asia.
Within the UK, there had been an unusually steep drop-off in collection volumes following the typical January peak. "They simply collapsed," said one market insider. Initially, this was not a problem for British paper factories, as some mills had scheduled downtime in the first quarter.
When buyers from the EU, particularly customers from Germany, suddenly showed interest in British recovered paper starting in the middle of March, the majority of available material had already been sold in monthly contracts. In other cases, British suppliers were simply unable to organise the logistics to transport the fibre across the English Channel quickly enough. This set off a price rally....
