After the August holiday lull, September has seen wood recycling picking up again with several key players on show at the 2002 Recycling and Waste Management exhibition in Birmingham. However, although wood prices have been pretty stable over the past months, reports from around the industry point to prices dropping in the near future, perhaps as early as October.
Wood prices are now around 40% lower than three years ago, and the feeling within the industry is that if the government doesn't do something to change the way the industry is organised, some potential recycling will not go ahead.
Supply
Manufacturers of machinery have been reporting that there appear to be plenty of buyers around for wood shredders, with exhibitors at the RWM in Birmingham seeing strong sales. According to wood recyclers themselves, this amounts to evidence of the abundance of new, small-scale players cropping up in the industry, which in turn is affecting the market considerably by boosting the amount of wood available.
Established wood recyclers believe that some of these new operations throughout the country may not wish to be in the market for the long term so causing some instability in traditional recycling routes. The rise in numbers of wood recyclers means that the supply is outstripping demand from the chipboard mills by some margin, which is expected to force down prices.
“There are too many people doing it,” one wood recycler told letsrecycle.com, “And they're not doing it in a viable way.”
However, the Glasgow-based machinery manufacturers Doppstadt, who have also been exhibiting at the conference in Birmingham this week, have also seen a lot of interest in their machines this year. The company is known for their niche in the high-investment end of the market, so their success could be an indication that there is also growth in stable, long-term wood recycling businesses.
Demand
The flood of wood on the market has come with some increase in demand from the chipboard mills, with the bulk of material currently going to the UK's chipboard manufacturers.
“It's an immature industry at some parts of the collection chain,” one wood recycler claimed. “There is massive competition to supply material.”
Some recyclers feel that chipboard manufacturers have been using the availability of recycled wood as a “stick to beat virgin wood producers”. However, with more recycled wood being taken in there is consequently less of a demand for virgin material.
A source at a company that collects wood as well as shredding it ready for board mills said: “Chipboard companies will take wood when they want it, but we have contracts which mean we have to keep collecting wood even if the board companies don't want it.”
After a fire in July, Liverpool-based board manufacturer Sonae closed its plant for a short period. Such incidents show just how vulnerable many UK recyclers are to small fluctuations in the operations of the limited number of board manufacturers. As one recycler said: “When one coughs, everyone else gets a cold.”
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