Latest export data from official US sources shows a 7.2% decline, the vast proportion of which is OCC. In Europe, markets have flat-lined.
The biggest news from the US in recent weeks is the release of the numbers for recycled paper exports for 2022. As we expected, it’s not a positive picture. According to official trade data, recovered paper exports decreased by 7.2% in 2022 versus 2021 to less than 15.5 million tonnes.
While some recovered paper grades showed growth, such as high grade de-inking, bleached chemical pulp and recycled brown pulp, they are niche grades and even when combined make up only about 15% of recovered paper exports. They don’t really ‘move the needle’.
In total, the 15.467 million tonnes exported of recovered paper is down by over two million tonnes in total compared to 2021. The biggest declines in tonnage came from those grades that are the bread-and-butter of recovered fibre collections and exports: OCC, newsprint and mixed paper, with each showing falls versus 2021 of 1.2 million tonnes, 128 000 tonnes, and 75 000 tonnes respectively.
As can be seen in these numbers, it’s all about the OCC tonnage, which represents over 60% of recovered fibre exports. The sources of the data here are the US Census Bureau, the US International Trade Commission and ISRI.
As for exports to individual countries, India is still the largest country importing recovered fibre from the US, followed by Mexico, Thailand, and Vietnam. Those four countries represent 60% of the total recovered fibre exports from the US. However, India was down 5% from 2021, and Vietnam was down nearly 17%. While Mexico and Thailand’s volumes from the US were up, the rises were small at less than 3% for both countries. While China used to be the biggest country importing from the USA, it now represents a paltry 5% of the tonnes exported.
While pricing and demand domestically show some slight shifts by region, the fact remains that the market domestically has not changed much over the past few months, so it is simply more of the same. Demand is soft due to a slowing economy, which results in mill slowdowns so that the manufacturing volume of new paper matches the slowing demand.
While there are ups and downs in pricing month-to-month, these are simply tweaks. The fact remains that in Q1 of 2023, compared to a year ago, prices of recovered fibre continue to be down 60 to 75% on a per tonne basis versus Q1 2022. While some are optimistic and see a turnaround coming soon, there seems to be little evidence of that.
The only bright spot, if you can call it one, is that generation of recovered paper is slowing. This is a result of a combination of things: slow retail sales and MRFs possibly sending recovered fibre to landfill because it is cheaper to landfill than it is to process. With prices depressed, it is difficult to justify high processing costs when a MRF finds it hard to recover the input costs. Therefore, if demand picks up, pricing may increase accordingly due to light generation.
The weather has also played a role in areas such as the West Coast which has seen significant collections of wet fibre, with buyers taking huge upfront deductions for excess moisture. The bottom line is therefore continued uncertainty in the US recovered fibre markets, both for domestic mill demand and exports.
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