Page 69 from: September 2014

Paper

Textiles
Closed: August 25 2014

By Olaf Rintsch, Textil-Recycling
K & A Wenkhaus GmbH, Germany

Markets feeling
the pressure
The market for original used textiles and textile
secondary raw materials is becoming ever more
diffi cult. Owing to recent developments in various
markets, the industry has witnessed a signifi cant
drop in demand for all grades and textile secondary
raw materials are under extreme pressure.
From previously exaggerated levels, prices dropped
sharply in the fi rst half of this year – but the worst
could be yet to come. Over the last two months, a
dramatic fall in prices of original material has been
recorded and, owing to rapidly deteriorating market
conditions and prospects for the coming months,
a further decline in values should be anticipated.
Warehouses are well stocked and goods are fl ow-
ing only very slowly.
Those German municipalities that have launched
their own collections in response to the high prices
of the last couple of years can expect to see hard
times in the future. Price negotiations will have to
take place and communities planning a bid for the
second half of this year will have to adjust to the
sharp fall in prices.
The markets in Eastern Europe, India and elsewhere
in Asia are no longer proving so fruitful while the
African market has dwindled virtually to zero.
Feathers can be sold but only at lower prices while
shoes are proving almost unsaleable. As for the
recycling grades, these cannot be sold at a profi t.
Only rags can be offl oaded at prices that have been
subject to minor change.

69September 2014

drop was reported for corrugated and
pulp substitutes.
In the fi rst half of the year, the value of
US recovered paper exports to leading
customer China dipped 1.3% to
US$ 995 million. To all destinations,
however, values recorded a 0.8% gain
to almost US$ 1.64 billion thanks to
improved revenues from, among others,
Mexico (+17% to US$ 134.2 million),
Canada (+15.6% to US$ 72.5 million)
and India (+8.5% to US$ 161 million).

Asia
Freight rates under pressure
August has been a very slow month with
no movement in recovered fi bre prices
or demand. For September, the likeli-
hood is that prices will edge lower on
increased collection and static demand.
Specifi cally, orders from China are sig-
nifi cantly lower as most of its mills are
buying locally; they are also carrying
large fi nished product inventories and so
are unlikely to resume strong purchasing
activity. Meanwhile, India has been buy-
ing reasonable volumes of recovered
fi bre. Healthy tonnages have been pur-
chased by Indonesia but a slowdown is
anticipated for September, as in Taiwan.
Freight rates are under slight pressure
and could well drop by US$ 25-50 per
container.

ISRI: one-bin collection ‘not
good for recycling’

The US Institute of Scrap Recycling Industries (ISRI) has
taken a decisive policy step on an issue that has provided
a focus for debate within the recovered paper sector over
many years. At its summer board of directors meeting, the
Washington DC-based body approved a policy in favour
of separating recyclables from waste prior to collection as
opposed to co-mingling or single-bin collection. ‘Sorting
before collection ensures that recyclable materials, par-
ticularly paper, are not unnecessarily contaminated and
degraded,’ it said in a subsequent statement.
‘Simply put,’ adds ISRI’s president Robin Wiener, ‘one-bin
collection is not good for recycling’ as it ‘jeopardises the
quality of recyclables’ by mixing them with liquids, food,
chemicals and other waste, thereby lowering or even com-
pletely destroying their value. Materials that are destroyed
‘will be diverted to landfi lls or incinerators, lowering recy-
cling rates and damaging the environment’.
The policy underlines that ‘the quality of the recyclables as
specifi cation-grade commodities is essential’.

Lee & Man sees ‘promising’
market prospects

A leading fi gure from within the Chinese containerboard
industry is bullish about the longer-term market outlook.
Raymond Lee, chairman of major recovered fi bre con-
sumer Lee & Man Paper Manufacturing, states that pros-
pects are ‘promising’ as the demand for packaging papers
in China ‘will keep on increasing, and more and more
backward production capacities will close due to limited
competitive power and tightened environmental protection
regulations’.
Lee & Man ‘hopes to continue expanding and developing
in suitable regions when the economy picks up in the
future’, he goes on to say.
Lee’s comments coincide with the release of the group’s
latest fi nancial results: for the six months ending on June
30 this year, Lee & Man recorded total sales volumes of
2.4 million tons and a net profit of HK$ 913 million
(US$ 118 million). Increased containerboard volumes were
attributed mainly to full commercial operation of its PM18
paper machine during the period. Furthermore, its
320 000-tons-per-annum PM20 paper machine came on
stream at Chongqing industrial park in July.

Contributing to the
Recovered Paper Market Analysis:
• Melvin de Groot (Van Gelder Recycling, the Nether-

lands)
• Mariëlle Gommans (Bel Fibres, Belgium)
• Joel Litman (Texas Recycling/Surplus Inc, USA)

RI-7 Analysis Paper&Textiles.indd 69 28-08-14 15:06