However, a further statement is not now expected until Tuesday 24 February 2015. The company has said that it was starting a process to go into administration.
The difficulties and possible closure of the Aylesford Newsprint mill in Kent, if the administrators cannot keep the business going, would be likely to have a significant impact on the recycling sector within the UK. Some suppliers have claimed that there were signs of slow payments at the company last week.
Today there were concerns among suppliers over whether or not the mill would even be taking in supplies of used newspapers over the next few weeks and whether its machine would continue for the time being.
Queues of lorries formed outside the mill today with only the occasional vehicle being let in. Drivers said that they had been waiting since around 7.00 am this morning (23 February) and were uncertain as to what the situation was.
If the mill was to close, it would mean a surplus of newspapers and magazines arising and new markets will have to be found for the material.
The UK produced 1,158,709 tonnes of newsprint from used newspapers and magazines in 2014 with up to about 400,000 tonnes being made by Aylesford.
Demand from UPM Shotton in Wales for used newspapers and magazines has also fallen with the closure of its PM1 machine although its second machine is fully operational.
But, demand is said to remain firm at the Palm Newsprint mill in King’s Lynn which produces 400,000 tonnes of newsprint annually and is the newest newsprint making machine in the UK.
Deflation
Recovered paper sector experts told letsrecycle.com that if the Aylesford mill was to close, there would be a deflationary impact on prices, not just for used newspapers but for other grades. Mixed paper prices have been falling in recent weeks and are expected to fall further.
One comment was: “There will be little extra demand for the newspapers which usually go to Aylesford from other UK mills. The market is already well supplied although in time the amount of used newspaper available will reduce as purchasing of newspapers by the public is falling fast. This will be bad news for councils as the value of this income stream will reduce.”
There are also expectations that surplus newspapers and magazines will go to overseas markets, notably India and China. But, there is every expectation that the prices paid will be well below current rates.
“You could even see India buying material for next to nothing and then having a competitive advantage over European producers,” one paper sector member said. “The situation cannot be resolved in the domestic market – the board mills will not want to use extra news and pams in their furnish for making containerboard material.”
Charges
With an historical eye, another sector member commented that it was 20 years since the main Aylesford machine had come on stream. He said: “The mid-1990s saw something of a boom in the industry with the opening of new machines in the UK such as Aylesford and also big demand from the Chinese market. But, prior to that we had a difficult time from 1989 through to 1992 and prices were low. In some cases around 1990 charges were made to take the material away and you could even see that happening again now.”
Others told letsrecycle.com that they believed that poor quality of material from commingled sources had caused Aylesford problems. The company has been a strong critic of newspapers from commingled sources claiming that contamination was causing problems.
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