Asia – Export volumes to China have been ‘hugely affected’ by the country’s decision to ban imports of mixed paper and to tighten quality controls on all fibre coming in from abroad, it is reported in the latest recovered paper Mirror publication from the BIR world recycling organisation.
It will be ‘difficult to achieve’ the contamination ceiling of 0.5% set by the Chinese government for recyclable fibres arriving from March 1.
‘The market is now looking at how these contamination levels will be applied and checked, and at what will happen to the rejections,’ says the Mirror. As a result of the new import strictures, fibre exports to China ‘weakened significantly’ over the course of the fourth quarter of 2017, with prices for mixed paper said to have slid from US$ 160-plus per tonne to just over US$ 100-plus amid ‘very limited orders’.
Over the same period, OCC prices fell from US$ 190-plus per tonne to US$ 170-plus. In many parts of Europe, last year ended with ‘a significant oversupply’ of mixed paper in particular.
‘The European paper market cannot substitute the sales to China and so stocks are increasing monthly within Europe,’ it is also reported in the Mirror. ‘The lowest grades are difficult to sell and the market price of material decreased at the end of the year without actually collapsing.’
If China’s import policy remains the same, ‘the Chinese will need a huge push with their collection infrastructure to keep feeding their mills with domestic material’, it is indicated. ‘This set of circumstances is also likely to lead to investment in paper mills in other countries such as Vietnam and Indonesia over the next five years.’
Indeed, on the plus side, export volumes to other Asian markets – namely India, Indonesia and Vietnam – have continued to grow. In Turkey, meanwhile, full capacity was achieved last year in both paper recycling and finished product output.
‘Neither the mills nor the depots are carrying a significant amount of stock and recovered paper imports are continuing to increase,’ it is confirmed.
Furthermore, demand for OCC in particular is expected to improve later in the first quarter of 2018 as new capacities come on stream in Central Europe.
This article is based on the latest World Mirror on Recovered Paper produced by the BIR world recycling organisation for the benefit of its members.