27 August 2019 by Steve Eminton

Paper recyclers warn of ‘critical market situation’

Low prices and volatilities in the waste paper market are putting local authority collections and the whole paper recycling sector under strain, waste paper recycling businesses are warning.

A statement from the ERPA trade group, now part of the Euric recycling association based in Brussels, today (27 August) warned of a “critical situation” faced by the European paper recycling sector.

Paper recyclers have warned of low material prices and volatilities in the paper market

And, the group, is calling for much higher contributions under EPR schemes – which for packaging is delivered via the PRN system in the UK – as well as government actions to try and facilitate more trading with countries such as China and Indonesia.

ERPA (European Recovered Paper Association), has the UK’s Recycling Association as a branch member and in turn the Recycling Association has many large and small UK recycling and waste management businesses among its membership.

Export

ERPA notes how paper recycling is a success story in Europe, but that 7-8 million tonnes is collected above what is needed for papermaking by mills in Europe. Accordingly, the surplus has been exported, largely to China, but this is under threat because of tight quality controls and a proposal to halt imports of waste paper altogether.

China and some neighbouring countries are criticised by the organisation for their import quality restrictions which it considers to be discriminatory and unrealistic.

“Recent trade restriction measures announced by countries such as Indonesia are based on inspections criteria which de facto result [in] a subjective assessment which needs to be urgently corrected.”

European Recovered Paper Association

ERPA said it: “strongly condemned the decision taken to anchor import restrictions on level of impurities which are disproportionately low and discriminatory since no standardized method to measure them is in place, leaving operators in a constant state of legal uncertainty as to whether a shipment is or not compliant. “Recent trade restriction measures announced by countries such as Indonesia are based on inspections criteria which de facto result [in] a subjective assessment which needs to be urgently corrected.”

The association noted that new capacity for papermaking will be coming online in Europe, but is still some way off.

UK market

UK recyclers have voiced their concerns about the current markets to letsrecycle.com. Some businesses have reduced staff and office operations with the main pressures being in the used cardboard and mixed papers sector.

While there has been some price increases recently, largely because of higher values of the PRN, the market remains generally pessimistic in price terms for the rest of the year, with orders in the last quarter for China expected to be very reduced.

Orders for recovered paper to China for the last quarter of the year are expected to be reduced

August prices for used newspapers have edged down although office grade material for tissue making remains in generally steady demand although price cuts for pulp may mean that office grade material will reduce in value this autumn.

One exporter remarked: “We have been through a tough two and a half years and there seems to be no respite on the horizon. Quality restrictions are all around, including for moisture. Some markets, such as Turkey, are taking more material and India is still buying but we are in competition with material from other countries.”

Others point to the need to ensure that merchants charge for containers and bin lifts with rebates reflecting the state of the market.

The main note of optimism surrounds the opening of new mills on the European continent and in South East Asia.

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