BIR Autumn 2024: 5 years, unplanned

Recovered fiber collectors and traders inhabit a very different world compared with the one they were living in five or six years ago, according to speakers at the Bureau of International Recycling (BIR) Paper Division meeting, held in Singapore in late October.

A train of events starting with China’s curtailment of recovered paper imports in 2018 and 2019 has caused global traders to seek out new markets and destinations. Meanwhile, mill buyers in China sought new fiber units to replace the overseas old corrugated containers (OCC) and other grades they used to import.

Jun Park, who manages the Singapore office of Switzerland-based Vipa Group, said data gathered for 2024 is showing the United States will export more than 9 million tons of recovered paper this year, while the European Union will ship out more than 5 million and Japan is on pace to export more than 2 million tons.

The U.S., EU and Japan long have been recovered fiber exporting regions, but the once leading destination, China, no longer appears on the leading importer lists.

Instead, Park said, India is poised to be the leading destination for exported U.S. and European recovered paper this year, followed by Malaysia, Vietnam and Thailand. Mills in Vietnam and Taiwan are eager buyers of Japanese OCC, Park added.

Park and fellow panelists Ranjit Baxi of London-based J&H Sales International and John Atehortua of Spain-based Recyclables Around the World noted mills in China have used several techniques to find feedstock to replace the OCC and mixed paper they used to import.

Baxi said an underreported aspect was China’s ability to build up its collection system. The nation now collects some 60 million to 70 million tons of recovered paper annually.

The nation’s mill operators also import recycled-content pulp, with Malaysia and Thailand converting recovered paper from around the world into pulp. In the first eight months of 2024, those two Southeast Asian countries sent more than 2.6 million tons of recycled pulp to China.

Although some Chinese mill companies considered investing to make such pulp closer to its scrap source in the U.S. and Europe, the U.S. sent only 18,900 tons of recycled pulp between January and August this year, and Germany just 2,300 tons, according to Park.

Unfortunately for recyclers in Europe, another circumstance—Russia’s invasion of Ukraine—produced an additional urgency to export shortly after they had started finding new markets.

High energy costs caused paper and board mills in Europe to curtail their production in 2022 and 2023, with graphic paper mill output down 24.2 percent and packaging mills’ output down 9.5 percent last year compared with the prior one.

That, in turn, prompted the EU to export an additional 2.3 million metric tons of recovered paper last year compared with 2022.

Another global conflict, however, when Yemen-based militants attacking cargo vessels in the Red Sea last year, again caused traders to consider new routes and patterns.

Cargo ships that bypass the Suez Canal and sail around Africa continue to serve Asian markets for European exporters, but the route adds about 15 days to the shipping time.

“It’s more of a lead time problem rather than a cost problem,” Atehortua said.

Yet another paper recycling disruption in the past several years came when COVID-19 brought restrictions on work and away-from-home activities.

The pandemic, Atehortua said, caused a low supply-induced OCC price spike in the short term, but a few years further on, it has affected the demand side of the market as the hospitality industry rebounded.

Since restrictions have been lifted, people with disposable income in many different parts of the world are more prone to spend on experiences rather than things, the trader said, denting demand for containerboard and other packaging boards.

A problem looming for European traders involves the clock ticking on recycled materials exports to nations with developing economies. For materials like OCC to flow to India or Southeast Asia, government agencies and corporations alike (in the receiving nations) will have procedures to accomplish from 2025 to 2027.

Despite the woes in the market, Baxi said the long-term view can be considered encouraging. The veteran trader told meeting attendees that recovered paper plays a crucial role in the global recycling chain.

"We’re saving a lot of carbon," Baxi said. "Let’s tell this story.”

The 2024 BIR World Recycling Convention Round-Table Sessions was held at the Raffles City Convention Center/Fairmont Hotel in Singapore on Oct. 27-29.