Europe losing out to USA in paper export market

Europe is falling behind the USA as the prime exporter of recovered paper to China, according to president of the Bureau of International Recyclings (BIR) paper division, Ranjit Baxi.

Mr Baxi told delegates at the Paper Round Table, in Barcelona yesterday (October 29) that recovered paper exporters from the US were beginning to fulfill a greater share of the Chinese demand for material than Europe, and suggested that the quality of material being collected throughout the continent could be a factor.

He said: The amount of material exported from America to China in the first two quarters of the last five years has grown 3.3 million tonnes. European growth over the same period has only gone up 1.4 million tonnes. Whether we are not giving the right price, or if the Euro is too strong, or if it is because of quality, somewhere we are not doing the right thing.

And, Mr Baxi, who is chairman of London based recovered paper exporter J&H Sales International, said that reduced consumption, resulting from the economic slowdown, was continuing to impact demand in the Far East.

He said: We are going through difficult times, global uncertainty in markets and threats of double dip recession are emerging. China is forecast to grow by 7%, its slowest growth rate in ten years, if you look at India it is a similar story, the only way out is to increase consumer spending.

For us in the recovered fibre industry, Chinas growth rates continue to drive exports of material. But the imbalance between European and American fibre exports are more visible and quality and price tends to be the primary focus.

Mr Baxi highlighted sharp increases in container prices over the last 18 months which he said had reached a very difficult level, as well as pointing to tougher quality controls brought in at Chinese and Indonesian ports as additional challenges to exporters.

He also warned that uncertainty in export markets and declining quality of recovered paper were of particular concern to the industry.

Contamination

The session also heard from Nuno Messias, raw materials purchasing manager for Spanish packaging producer, Europac who also echoed concerns about quality. Mr Messias claimed that contamination levels in recycled paper used by his company had reached problematic levels and that an over-reliance on export within Europe had seen a disparity emerge between export and domestic paper grades.

However, Mr Messias welcomed the news that port authorities in the Far East were imposing stricter quality requirements on recovered material, and commented that it could help improve the quality of material being produced within Europe.

Something I have said before is that there is one quality for domestic use, and one quality for export, people have disagreed with me in the past but I am glad to see that recognized. For China and Indonesia to impose stricter quality requirements is good news for us because we have a major problem with quality.

According to Merja Helander, director of Finnish paper recycling firm Lassila-Tikanoja, president of EPRA (European Recovered Paper Association) and a board member of the BIRs paper division, the development of End of Waste criteria for paper could help to address concerns about European paper quality.

The criteria would determine when the material can be considered a product, rather than waste, and were discussed by a European Technical Committee on the Environment in July.

However, Ms Helander said that technical discussions on the matter had stalled due to opposition to the inclusion of multi-material paper, such as beverage cartons, from being eligible to achieve the status, and said that it was unclear when a final agreement would be reached.

She commented: The main reason for paper failing was the inclusion of multi-material paper, countries like Germany and Spain were strongly against this material being included in the scope of the regulations.

The process continues and some people doubt if paper can ever get end of waste status, but hopefully at the beginning of 2014 or earlier it will be achieved.