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EXCLUSIVE: Green Fence ruffles UK paper market

Higher import quality demands in China are putting pressure on the UK recovered paper industry, with materials quality improving and new market opportunities emerging, industry insiders have told MRW.

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Some 55% of recovered paper produced in the UK is exported, and China has traditionally received over 70% of it, Stuart Pohler, recovered paper sector manager at the Confederation of Paper Industries (CPI), told MRW.

Since February, the Chinese crackdown on the import of low quality materials under Operation Green Fence has led exporters to ship less because of concerns over the possible rejections of their containers, he said.

Exports of all grades recovered paper has decreased 8.5% year-on-year in the six months to June 2013, according to figures from the CPI.

Declining export possibilities, however, have caused UK reprocessors to focus on the quality of their materials, Paul Briggs, managing director at Mark Lyndon Paper Enterprises UK, told MRW. Contamination levels of the materials supplied to him have fallen from an average of 7% to 1.5%.

Better quality has been achieved through increased labour force and machinery upgrades at large recycling companies, said Briggs.

The drive towards higher quality materials has also led to the opening up of new business opportunities.

Briggs says some recycling companies have started buying MRF paper materials and reprocessing them on slower sorting lines to cut contamination, achieving higher quality output suitable for export.

“As an exporter I welcome the Green Fence,” he said. “It is the right thing for the UK that we are sending quality materials to the point of origin where [manufacturers] need it.”

But while good quality materials is still leaving for China, what is happening to low grade recovered paper remains unclear.

MRW understands that increasing quantity have been used in UK paper mills, which could have been more inclined to buy the materials as a result of lower spot prices, which are now in the range of £30-£50 per tonne. Lower prices would mean paper makers are able to offset the cost of dealing with the disposal of the contaminants.

CPI figures for the six months to June 2013 indicate that the overall intake and usage of all grades recovered paper in UK paper mills was practically flat year-on-year.

However, the intake and usage of the mixed-papers grade was up around 60% in the period between March and June.

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