Francisco Donoso, President of BIR’s Paper Division and Dolaf Servicios Verdes (in Spain), comments on the current situation in the global and European paper & board recycling markets.
« Prices in Europe and the USA were quite stable during the latter months of 2022, staying at very low levels after declines in the previous quarter for OCC and deinking grades; very subdued demand for finished products seems to have been the reason behind this. Stock levels are quite high at most paper mills owing to low consumption whereas stocks in recyclers’ yards are perhaps lower as a result of reduced collection volumes. However, our main problem is the weak demand for recovered paper.
For white grades and pulp substitutes, the situation is quite different. Prices dropped slightly but remained at the high levels seen for many months. Demand for these grades has been strong owing to the high price of virgin pulp. However, still-high energy costs are proving to be a huge problem for every paper mill, leading to additional downtime when taking into account the aforementioned lack of demand.
On January 17 this year, the European Parliament voted in favour of introducing stricter procedures and control measures for waste shipments from the EU, including a ban on all waste destined for disposal. The EU authorities are considering most wastes as if they were all the same – a position which, in my view, is neither fair nor reasonable. Exports of recovered paper are always for recycling and never for disposal and yet the same restrictions will apply, with the result that recovered paper exports will be much more difficult in future. All paper mills interested in importing from the EU will have to pass strict audits to demonstrate that their production standards are equivalent to those in Europe, and yet these audits are not deemed necessary for European mills when buying.
In Asia, prices have been a little more volatile. Paper mills with the same problems as their counterparts in the EU and the USA are also offering weak demand for recovered paper and therefore low prices. The OCC price improved somewhat in October and November but fell again after a few weeks.
China has removed its taxes on imports of paper and board, and so deliveries from other Asian countries are increasing, as are therefore production and OCC demand. Also improving is vessel and container availability, leading to more helpful freight rates and thus offering a little support to our damaged market.
India has reviewed the prescribed limits for non-paper materials in recovered paper consignments from other countries. This new measure will bring further controls in the country of origin and an obligation to recycle all imported material without the option of disposal. It also will bring more bureaucracy in terms of, for instance, documentation and contracts. »