The development of Chinese domestic collection and recycling infrastructure has meant that UK recovered paper exports to China have slowed recently, while the country’s recovered plastic imports continue to grow rapidly, according to the second WRAP Chinese Market Situation Report.
China remains the UK’s largest receiver of UK recovered paper exports, whose share rose from less than 10% to a high of 62% in 2009. This declined slightly to 61% in 2010. The report states that part of the reason for this is a result of a “significant decline” in Chinese imports of recovered paper in 2010 of 11%, despite continued growth in overall paper and board production.
The UK exported 2.8 million tonnes of recovered paper to China in 2009, which was 12% up on the previous year. It supplies China with 11% of its imported recovered paper needs.
WRAP director Marcus Gover believes material quality is key to the UK staying competitive.
He said: “What is clear to me is the need to think one step ahead and ensure UK materials remain competitive.
“Quality remains a key issue at home and for the UK’s overseas markets. If China has access to quality materials closer to home, we have to make sure that UK exports are also of excellent quality.”
The key reason for the 11% decline in recovered paper imports is believed to be due to China’s substitution of imported material by paper recovered from the domestic waste stream. Research found that Chinese recovered paper consumption grew more quickly than that of imported recovered paper between 2007 and 2009, “and seems likely to have accelerated in 2010”.
According to the report, Chinese paper mills may be collecting more from the domestic market in a bid to control input costs in the battle against high imported paper prices. They are also seeking to streamline the recovered paper supply chain to secure stable resources.
Production of packaging-related grades of material were found to have increased, while early estimates show newsprint production has been growing slowly since 2007 and started to fall in 2010.
Production of paper and board in China during 2009 increase to 86.4 million tonnes, and this is thought to have risen again in 2010 by the China Paper Association. It has overtaken the US to become the world’s largest producer of paper and board in some instances.
WRAP head of market knowledge Liz Dixon Smith told MRW: “The 11% drop in China’s recovered paper imports is a very striking statistic. But this drop is not because China’s paper production has decreased – in fact, China’s production capabilities continue to increase quite rapidly. Rather it reflects two factors: China’s drive to increase domestic collections which is increasing its ability to tap into its own domestic recovered paper; and a decrease in paper consumption in developed countries, including in the UK, and therefore a fall in recovered paper arisings.
“Paper sourced from China can be used as a substitute for some imported recovered paper. If the supply of recovered paper were to outstrip demand, then the question is “could it be UK material that is squeezed out first?” This provides a rationale for ensuring UK material remains competitive.”
China’s increase in domestic plastic collection has meant the proportion of China’s recovered plastics consumption that was imported has not increased. But Chinese demand for recovered plastics has grown from four million tonnes in 2000 to 15 million tonnes in 2007, 17.5 million tonnes in 2009 and preliminary estimates show demand in 2010 to be 19 million tonnes. Demand is forecast to grow strongly during the next five to 10 years, in line with the economy.
WRAP states that the Chinese government wants to implement standardised collection and reprocessing schemes, which is expected to further push domestic collection of the material.
Imports of plastics are predicted to remain a “significant part of the supply mix” but are expected to grow at a slower pace (10.5 million tonnes by 2015) than domestic supplies of recovered plastics (18 million tonnes by 2015 or 64% of Chinese demand for recovered plastics). It is significantly lower than the estimate given by WRAP’s first Chinese report.
WRAP reports that the lack of official statistics and the fragmented nature of the sector make it difficult to analyse the plastics reprocessing industry. China collects a wide variety of plastics, using them mainly within packaging, construction and electrical and electronic appliances.
The report says: “Available evidence suggests there is strong Chinese demand for the full range of polymers exported from the UK.”
Gover added: “As part of planning ahead, I think there is an opportunity to continue to drive to keep increasing UK demand: plants such as the new Biffa mixed plastics site in Redcar, part-funded by WRAP, will go some way towards providing a balanced portfolio of end-markets for UK materials while promoting job growth in the UK.”
|End market||Plastic grade needed:||Product created|
|Packaging||polyethylene, recycled PET, polypropylene, r-PE, r-PP||Shampoo bottles, bags, cement and fertiliser bags, plastic boxes, plastic salvers|
|Construction||r-PVC,r-PE, r-PP, extruded polystyrene, r-EPS, r-PS||Pipes, boards, insulating material for walls, flat concrete roofs and steel roofs, waterproof film, wood-plastic composite for handrails, stairs and floors|
|Electronics||r-ABS, r-PS||Television shells, computer peripherals such as keyboards and mice, fridges.|
The report can be found here: http://www.wrap.org.uk/recycling_industry/market_information/market_situation_reports/index.html