Global markets for recovered paper remain extremely challenging, according to The Recycling Association chief executive Simon Ellin.
But he will also argue in his upcoming State of the Nation report that the fibre market has gone through difficult patches before, yet always recovered eventually.
In his report, which will be given at The Recycling Association Conference 2019 on 12 November in London, Simon Ellin will say:
“We currently face a perfect storm that makes the market extremely tough for many of our members. A combination of reduced Chinese quota, Brexit uncertainty and a General Election, an increasingly difficult global economic situation, reduced demand from European and other global mills, a lower PRN/PERN price plus increased shipping costs and volatile currency markets have forced down OCC prices in particular.
“As an industry, we have ridden similar challenges before. The most glaring example is the crash of October 2008 when prices fell to nothing, but eventually recovered. When Aylesford Newsprint went bust, there was doom and gloom, but our members found new outlets for news & pam.
“If you look on the horizon there are reasons to be positive. China could stay open longer, although this isn’t confirmed yet and we should expect reduced quota if it does. But the big Chinese mill groups are building new capacity in places like Malaysia, Vietnam, India, and Myanmar and this should eventually bring more demand onto the market.
“I’m not sure what will happen with Brexit, but we have to hope that a General Election will start to bring some certainty once it is resolved.
“As we know, markets are cyclical, and eventually the global economic situation will improve and this will lead to more demand for our material.
“However, The Recycling Association has been at the forefront of improving material quality through our Quality First campaign. We cannot let quality slip. It is clear that those who will be most successful in the market will be those who can provide the best quality material to the end destination. High quality is also essential for keeping vital export markets open. We don’t want to give other markets the excuse to ban imports because they receive poor quality material.
“Indeed, The Recycling Association has pioneered our TRACA blockchain project that will provide the supply chain with quality and compliance information. This is the UK recycling market showing to the world that it takes quality seriously.
“But we should also be positive about the general direction the population is taking. People are increasingly interested in recycling and sustainability. They want to use products that contain recycled content. Retailers and manufacturers are responding by looking at ways to do this. This creates extra demand for our material and can only be a positive for our industry.”
The Recycling Association Conference 2019 takes place on 12 November at the offices of Ashurst in London. Tickets are £99+vat for non-members. See here for more information.
