The coronavirus outbreak is hitting the recovered paper sector hard, according to the UK’s Recycling Association.
‘Container availability has become tough and the generation of paper is lower due to fewer people shopping and more people working from home,’ says the industry body. ‘Plus it is causing uncertainty for the industry of what the outlook will be like over the coming months.’
According to the Recycling Association, it has become much harder to find containers to ship material to Asian markets such as Indonesia, China, India, Vietnam and elsewhere because boxes were already stuck at Chinese ports due to Chinese New Year in February. With shipping lines increasing container prices, there is a danger this this will be a knockout blow leading to lower prices in a market suffering from painfully low prices.
‘With people also shopping less and more people working from home, members of the association are reporting that there is less material around to trade, even if they can find haulage and containers to get it recycled.’
In addition, there is massive uncertainty about how the coronavirus will develop and what this will mean for an already struggling paper recycling industry. ‘The UK recovered paper market is in a bad place at the moment,’ comments Recycling Association’s chief executive Simon Ellin.
‘Mixed paper is now pretty much a gate fee material and other grades of paper are all seeing falling or very low prices. Prices look set to fall further due to higher container rates being set by the shipping lines. Several companies are already investigating options for outside storage for the material on the assumption that they won’t be able to move all of their recovered paper.’
Hit hard …again
The crisis is the latest setback for the recovered paper sector, the Recycling Association insists. In recent years, the international market for recovered fibre has suffered a number of blows and this has proved challenging for the UK in particular.
‘Firstly, the closure of Chinese markets for mixed paper and gradual reduction in quota for cardboard and office paper has largely taken away the UK’s most significant buyer. Other markets such as Indonesia, India, Vietnam and Malaysia have taken up some of the slack but not nearly enough to replace the tonnage that used to go to China,’ the association argues.
‘Secondly, although vast improvements have been made, some poor-quality material is still being provided from domestic collections and this risks paper having nowhere to go as markets close. International markets are increasingly introducing tougher inspection regimes and won’t accept poor quality material from the UK. Now, the coronavirus is making a difficult situation even harder.’
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