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Recovered paper exporters look for new markets as China tightens scrap paper imports

(Brussels, July 27, 2017) Supported by strong domestic dynamics and healthy global demand, Chinese economic growth registered 6.9% in the second quarter to match that of the previous three months. Emerging economies are expected to grow at an average of 3.7% and the projection for the EU is 1.7%.
During the second quarter, exporters became concerned about the possible impact of the enforcement of China’s “Border Gate Sword” operation, with an announcement of the implementation of 100% control on all scrap imports during July. This certainly had an effect on exports to China during May and early June, with exporters looking more aggressively towards new markets for the purposes of diversification.
The good news was that sea freight rates were not able to hold at the very high levels attained during the first quarter. A noticeable decrease in rates was seen in the second quarter, dropping from levels close to US$ 2000 per 40-foot container to nearer US$ 1200 (…)
Freight rates have fallen sharply from their recent peak around US$ 2000 per 40-foot container to nearer US$ 1200 and vessel space is said to be more easily obtainable in general.
In the Mirror’s review of second quarter price developments, it notes that ‘strong’ OCC demand from European and Asian mills drove prices from US$ 255-plus per tonne at the start of the period to a high of US$ 267-plus, although there was then a retreat to US$ 250-plus by the end of June. On the back of low demand, mixed paper slipped from US$ 160-plus per tonne during the second quarter to around US$ 135 at its close.
As regards recovered paper availability, there was a continuation of the trend among paper mills in Germany towards direct deals, it is also reported. Meanwhile, Italy has been attracting ‘consistent’ fibre demand from Turkey while the UK notes a ‘realignment’ in middle grade prices that has increased the interest shown by Indian buyers.
Many mills in Scandinavia are said to be relatively short of recovered fibre stocks and so ‘a hectic summer’ is predicted. At the same time, exports of paper for recycling have suffered ‘greatly’ of late as a result of the strike at the Gothenburg container port, the biggest in Scandinavia. ‘Some paper for recycling is being ferried by truck to northern European ports,’ it is confirmed. [Extract from BIR World Mirror on Recovered Paper / Quarterly Report – July 2017] (Source: BIR /

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