Recovered paper sector looks to hold on to charges as prices fall

The comment comes against a background of price cuts by some home mills in the wake of a weaker export market as well as rising stocks on the continent and in particular in Germany. In the Old kls (cardboard) sector BPB Recycling has reduced the price it pays for mill bales by £10 a tonne to £45 and other mills are thought likely to make reductions soon.

A market with lower prices is again raising the issue of the importance of ensuring that merchants collecting material can impose charges to help cover some of the costs they face.

Ray Watson, chief executive of the British Recovered Paper Association, said that the fall in the price of recovered paper, once again raises the problem of collection and processing costs being above the selling price achieved by merchants.

He added that a difficulty faced by the industry was that when charges are imposed the customers “will look for cheaper alternatives and the recovered paper becomes waste paper and is sent to landfill.”

‘Bill for collection’

One merchant in the north of England confirmed that charges were a difficult issue. “We have tried to maintain a firm but fair line with our customers. We send them a bill for collection with a credit for the value of the material. I think many are beginning to get the message but it could be a problem when some of them see the credit element falling.”

Looking ahead as to how the market will develop this year, current forecasts are for a slow down in the first two quarters of the year.

John Cutts, of Doncaster-based Cutts Bros said: “It is hard to put your finger as to where this year will go. Certainly the first two quarters of the year are going to be difficult. We canot ignore the world trade cycles.”

He added that there was real determination in the industry not to lose the charges that have been introduced by many companies.

“Wherever there is a balance in their favour businesses are usualy happy. But, it is different when it starts to cost them.

Fortunately, waste management charges have gone up a little and our charges seem a bit better understood. The message is clear, the waste paper sector cannot subsidise the industry again.”

Brian Perry of Perrys Recycling in the south-west of England said that he also considered that there would be a slow start to the New Year. “The market is looking a little quieter with lower prices and falls in the spot price for pulp.”