Diverted ships a fresh woe

Fresh conflict in the Middle East has forced shipping lines onto longer, costlier routes. In the US, secondary fibre prices are sustained by decreased supplies.

Just as businesses learn to cope with higher energy bills, inflation and weak economies, a fresh conflict is added to their woes. Attacks on shipping in the Red Sea from militant groups in the Yemen come on top of security concerns in the region since October because of the situation in Gaza.

For fibre traders, one consequence of the Yemeni action is significantly higher transport prices with cargoes routed on longer journeys via the Cape of Good Hope. Surcharges of US$ 1 500 have been reported.

Exporters across Europe and the US are affected but one told Recycling International ‘the resilience of our industry has been proved by how we have managed to keep material moving’.

The Red Sea crisis has prompted the Dutch secondary paper industry body FNOI to call for legislation requiring shipping companies to provide transparency about the structure of costs and allowances.

According to FNOI: ‘Container ships that detour by sailing around the Cape require an average of 10 days or 30% longer sailing time. However, there are also savings on canal toll costs, which can amount to as much as half a million dollars for a one-way trip. The rate increases therefore appear to be disproportionately high and there is no transparency whatsoever regarding the structure of the allowances.’

US export shift

Turning to exports of recovered fibre, the demand from India, Indonesia, Taiwan, and South Korea declined during 2023. On the other hand, Malaysia and Thailand increased their purchases significantly. Thailand is likely to prove to be the biggest buyer of US OCC once the final numbers for the year come in and Mexican imports will fall by around 50%. Canada also purchased less fibre from the US in 2023 compared to 2022.

Read the full market outdate in our latest issue >>