Cawleys Director, Tony Goodman, highlights the issues facing the China export market for waste paper and card
As it becomes more and more likely that China will impose a ban on waste paper and card imports for recycling by the end of 2020, there is a real and pressing need for investment to address the issue of oversupply which could cost UK exporters up to £400m.
Europe and the US, who are the largest exporters of paper and card recyclate to China, have already taken measures to attempt to counteract the current Chinese quota restrictions by diverting these materials to India and South East Asia. However, whilst this has gone some way to ease the problem of over-supply in the UK, with a total ban looming an alternative solution will need to be found and this is likely to require significant investment.
Year on year China’s import quotas have been declining at a rate of around 30%. This is because China is looking to stabilise its supply and ensure that the quality of the materials it works with are as good as possible. They are doing this by focusing both on recycling methods on home turf and investing in ownership of papermills overseas.
Waste export values
With developments such as this already beginning to impact on export values, the price the UK receives on cardboard has already dipped by 30%, whilst the price for paper has dropped by as much as 70%. As a result of China’s lower reliance on Europe and the US for paper fibres, these price reductions are likely to increase over the next few years.
With such developments on the horizon, it is likely that there will be a significant oversupply of these materials for some time to come. Although there are alternative markets, these are not large enough to soak up the excess volumes in the UK market. At the same time, with more and more goods purchased online in the UK, the amount of packaging is increasing, resulting in higher and higher volumes of waste paper and card. More investment is needed to improve the recycling infrastructure, specifically focusing on collection and sorting. The UK has already gone some way in doing this with recycling targets and more vertical integration and collaboration across the supply chain but more needs to be done to involving packaging companies, local authorities and recycling firms to find a long term viable solution.
Sort and segregate
In order to maximise recycling rates, we need to make the most of the opportunities we have whilst they exist. To achieve this, segregation needs to become second nature so that the card, paper and plastic products we handle on our clients’ behalf it is as clean and contamination-free as possible. This will enable us to achieve the best prices currently available for this important recycling commodity. What’s more, we all need to get into the habit of keeping the waste as clean and dry as possible so that when the China ban does kick in Cawleys and their clients will have a reputation for supplying the highest quality material to the secondary market. This will give us the best opportunity to seek alternative avenues for our client’s paper and card waste in the future and benefit us all.