Italy

Despite COVID-related complications, Italy’s production of paper and board remained the third highest within the EU in the first half of 2021 at 4,858,209 tons. The six-month total was up 11.5% on the same period last year while June 2021 production of 820,193 tons represented a year-on-year increase of 19.7%. Recovered paper consumption of 3,034,584 tons in this year’s January-June period meant an increase of 16.4% compared to the opening half of 2020. This reflects a better appreciation of secondary raw materials and of the technical and production improvements within the sector, in line with the switch in demand from white to brown paper and board as a result of pro-online trends. Other positive influences have included better disposal of pulper waste and some commercial changes, such as small and medium-sized mills being absorbed by major operators or other forms of consolidation.

In terms of the packaging recycling rate, Italy is already two percentage points ahead of the 85% target fixed by the European Commission for 2030. This is despite the handicap of energy costs that are around 20% higher than in neigbouring countries.

Since July, recovered paper demand has remained good and largely stable, with some increases in the second half of September when OCC climbed to Euro 190-195 per tonne and mixed paper to Euro 180. The low availability of magazines etc. for deinking has led to prices of around Euro 200-210 per tonne whereas higher grades have remained more stable at Euro 400 for woodfree, Euro 300 for white ledger and Euro 270-280 for bookbinders’ cuttings (all prices are ex-works). Owing to good demand, materials have been absorbed generally not far from the point of origin.

There have been difficulties in exporting to distant countries owing to a scarcity of containers, with reports of delayed ship departures because of incomplete loading. Shipping to Asian markets is still reasonably possible. While demand may be consistent, collection remains weak despite some improvement as a result of industrial restarts; this increase is particular noticeable with municipal selective collections largely under the auspices of Comieco. A number of auctions handled by Comieco in recent months have covered the period to the end of the year, thus suggesting that demand is expected to continue in the coming months. The cost of selective collections is estimated to be Euro 200 per ton, the same as that for landfilling.

Direct connections have emerged between consuming mills and smaller municipalities, as well as between paper mills and converters of their reels, thus perfectly closing the circular economy loop. Of course, this has impacted mills’ sales prices, with the effect that the container could have a higher value than the contents in extreme cases. This could create problems for some converters and to some just-in-time delivery circuits.

Buoyed by good demand, recovered paper prices have headed higher. At the same time, domestic mills will suffer as a result of the steep increase in the price of gas, their main source of energy.

The Italian government’s formation of a new Ministry of Ecological Transition is directly relevant to the recovered paper sector in terms of offering solutions to the problems of waste and of simplifying currently complex bureaucratic systems. Should the near future see an end to the more serious complications brought about by COVID, hopefully this will lead to a more efficient regulatory approach.