21 February 2017 by Steve Eminton

Paper sector in positive mood after ‘stable’ 2016

The latest paper manufacturing and recycling data published for 2016 paints a picture of a more stable market after years of machine closures with optimism that 2017 will see a stronger performance by domestic mills.

However, overall the amount of paper manufactured in the UK on an annual basis fell again according to the industry figures. And, there are signs too that the tonnage of paper collected for recycling – commonly known as waste paper – is now reducing slightly every year.

The DS Smith number six paper machine at its Kemsley mill which is a major producer of cardboard material

But, overall the domestic picture from the 2016 numbers is similar to 2015 with the export market continuing as a vital outlet for waste paper not needed within the UK (see letsrecycle.com story for 2015 report)

The year saw no major mill or machine closures although there were some disruptions due to flooding at some sites and while others underwent investment, such as at Iggesund’s Workington mill. Plus, a Smurfit Kappa machine at Snodland went through commissioning ahead of a step up in production volumes.

One sector expert told letsrecycle.com that there are hopes that 2017 could be a good year in terms of UK production and usage of recovered material, even bucking the trend of what had appeared to be an industry on a downward slope.

The reductions in collection volumes come against a background of generally firm prices for waste paper for recycling in 2016. And, prices for used cardboard and mixed papers have increased this month and are expected to rise again in March. Some paper sector experts consider that a lack of any increase in arisings and the volumes available for recycling within the UK are one factor driving the price rises for waste paper.

The production and collection data figures for 2016 have just been published by the Swindon-based Confederation of Paper Industries’ statistical department. They confirm that collection volumes of all waste paper last year stood at 7.8 million tonnes. The largest component of this was 4 million tonnes of used cardboard which was at a similar level to 2015.

Production

Materials which saw declines in collection volumes in 2016 compared to the previous year were notably mixed papers and mechanical (newspaper) grades, down 1.9%. This sector also saw a significant fall in production at the mills – down almost 15% to 897,020 tonnes in 2016 compared to 2015.

The data for mixed papers and newspapers is difficult to analyse because newspaper mills have their figures mixed in with the mixed paper used by the cardboard mills. This is due to fears that too much transparency would cause competition concerns.

Mixed papers have been in particular demand by the UK’s cardboard mills (primarily DS Smith, Saica and Smurfit Kappa) with a move to signficantly increase their use of mixed papers and reduce the use of cardboard which helps reduce feedstock costs.

So, the relatively small downturn in the grades production is seen as likely to have been in the newspaper sector, with figures for the last three months of the year reduced as Palm Paper in King’s Lynn suffered a fire in its mill.

The tissue sector remains important within the UK representing one fifth of UK production. The sector uses both recovered paper (usually office grade materials) as well as virgin fibre from wood pulp.

Export

The importance of the export market to the UK is again brought home by the annual data. Exports are now nearing the 5 million tonne mark with 4.9 million tonnes of waste paper exported in 2016, one per centage point up on 2015. This reflects a continuing steady rise in exports – in 2012 for example, 4.5 million tonnes was exported.

Commenting on the 2016 figures, Simon Weston, raw materials director at the Confederation of Paper Industries, said: “I don’t think these figures down show a decline in recycling although there is a fall in the graphics sector. What we are seeing is a lightweighting of packaging material so overall we are seeing more recycled.”

Related links

Confederation of Paper Industries

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