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Turbulent conditions have arisen in the recovered paper sector over recent months owing to the combination of factors mentioned in our January 2021 Mirror report. The scarcity of industrial collection volumes - which represent the major source of material - has become more marked because of interruptions to industrial activity owing to the pandemic and to delays in some areas caused by winter weather. Furthermore, there has been the additional impact of high transportation costs and abnormal freights connected to the Chinese New Year and to Ramadan.

The consistent direct or indirect export of reels for conversion in the Far East has served to reduce recycling quantities in production countries. The sustained demand continued in February and March from not only China but also Indonesia, India, Vietnam and the traditional markets of Taiwan and South Korea, leading to strong price increases for the commercial bulk grades. Sales were made at Euro 160-180 per ton port of departure, rising on some occasions above Euro 200 for OCC and with a surprising recent fall of Euro 40-45 per ton. Mixed paper prices climbed to around Euro 140-150 per ton and have remained reasonably stable in recent days, with the usual price differential to OCC not apparent at present.

Italian mills have been working constantly, albeit amid evident recovered paper supply problems for reasons of production cost that had determined a price increase for finished reels. The crisis created problems for the public auctions and subsequently also the abandonment of those supplies not yet effected to the buyers because of the fall in prices.

Meanwhile, operators are being asked to abide by a number of rules governing terms of collection, stocking, sales, quality inspections and so forth; these are sometimes contradictory and often differ from region to region. The majority of these rules are being issued by those of a bureaucratic mindset who speak at meetings about the indispensability of the Circular Economy, frequently attended by people who have good intentions but who are not competent to comment on many of the important issues raised.

In the last two weeks, the market has orientated itself towards a greater stability that should enable better planning of business activities.

Looking to the near term, the apparent decline of COVID cases will mean a reasonable resumption of activities and thus recovered paper collections. Exports within the EU and surrounding regions are continuing and prices remain stable. For the moment, collectors are holding moderate stocks while mills are operating at normal levels.

There is the continuing problem in some regions of eliminating non-recyclable waste via sorting of the basic materials and via urban waste sorting. A single definition covering the original waste coming from industry and that from municipal collections is creating confusion and competition among private and public operators. It is to be hoped that continuous debate and meetings surrounding the Circular Economy will create reasonable, workable conditions.