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Paper and board recycling sector faces familiar foes at start of 2022

  • 20 January 2022
  • Paper Quarterly Report 2022-01 | Paper

A concise summary of the BIR World Mirror on Recovered Paper – issue January 2022. Full version with detailed market reports available in the Members Only section of the BIR website.

The combination of generally strong demand and more stable but still-high recovered fibre prices has provided recycling businesses with good reason to be upbeat about market conditions heading into 2022. At the same time, however, the outlook is being clouded by a number of worries, including the familiar foes of disrupted logistics, stricter legislation and COVID-related uncertainties, it has been revealed in the latest BIR Paper Mirror.

There is continuing heavy pressure on the availability of vessels and containers for shipping material. Fewer routes and sailings are on offer, and freight costs remain extremely inhibiting. Problems were particularly acute ahead of Christmas owing to a lack of capacity and mills wanting to stock up prior to the holiday period. Deliveries by road have been hindered, meanwhile, by a lack of drivers as a result of COVID.

Meanwhile, problems surround key overseas markets: EU shipments to India are unlikely to resume before February at the earliest owing to an administrative error by the Indian authorities which is in the process of being corrected; and following in the footsteps of China and Indonesia, the Malaysian government has introduced stricter controls on recovered fibre imports, including pre-inspection in the country of origin.

Another immediate problem for all businesses, and particularly for paper mills, concerns spiralling energy bills.

Mills took little or no production downtime over the festive period and are generally busy, helped by the growth of e-commerce and the observable transition from plastics packaging to paper. In many parts of Europe, however, recovered fibre collection volumes have been flat to slightly lower in recent months, not least because of COVID-related restrictions. Notably, there has been a decline in the volumes of sorted office paper grades collected from many large buildings as a result of work-from-home directives, with the alternative municipal mixed paper collection systems leading to the loss of a large proportion of “white” recovered paper.

The trend towards development of new paper- and board-making capacities is set to continue in 2022. For example, the start-up of two new machines in France will add more than 1 million tonnes to annual domestic output. And in Turkey, a number of mill groups are pursuing new investments in order to keep pace with increased demand, including Modern Karton which has finalized its decision to establish a fluting and liner facility at Zonguldak with an annual capacity of 550,000 tons.

Having imported approximately 1.5 million tons of recovered paper last year, Turkey is expected to buy in perhaps 2 million tons during the course of 2022.

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With contributions from its members, BIR publishes periodical commodity reports under the label "BIR World Mirror". These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.
The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.

 

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