The waste paper market continues to be hit by what one contact described as a “perfect storm” of market conditions, although many have reported that prices have not dropped as much as initially expected.
In October, China announced that it would bring in a new testing regime for dry pulp entering the country. This had knock-on effects on the UK which exports significant volumes of paper to Southeast Asia for onwards sale to China. The tests were expected to cause a four-to-six-week backlog as containers awaited testing in China. However, many in the industry have said that volume has continued to move.
At the same time, US mills have had to dramatically reduce their prices due to President Donald Trump’s tariff war. This has driven up demand from India (which has a preference for US paper) and reduced its demand for European/UK paper. At the same time, reels from the likes of Canada and the Nordic countries have been flooding the European market as they struggle to sell to the US.
Although the softening has been significant, some contacts told Letsrecycle that it was not outside of what had been projected previously. They have reported that although demand is low, material continues to flow.
Looking ahead, it is predicted that the situation will worsen in December. Prices will likely still be low but further stabilise in early 2026. Some contacts predicted that the situation may improve towards the end of Q1 2026.
Effect on prices
Against the above backdrop, Letsrecycle has recorded decreases across most paper prices.
Multigrade and Sorted Office Waste (SOW) continue to be worse hit with very little demand in the UK and EU and no demand in Southeast Asia. These grades have therefore seen a sharper decrease.
Pulp substitutes also continue to struggle as they continue to be outpriced by virgin pulp.
View our more detailed paper price index here.
NB: From January 2026, Letsrecycle will introduce a new paper grade between Mixed Paper and OCC called “1.04”. This will refer to OCC with a mix of up to 80/20. This category will be introduced to better define and separate the current OCC and mixed paper grades.
Under export pricing, the “standard quality” and “high grade” OCC categories will also be removed. The full range will remain.
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