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Japanese disaster may not impact recovered paper market

Two weeks after the earthquake and tsunami hit Japan no dramatic changes in the recovered paper market have been seen leading some in the industry to believe it may not have an effect.

According to industry experts around 2.5m tonnes of paper production in Japan has been taken offline, while 70% of Japan’s mills are believed to be operating. Those taken offline including four of those owned by Japanese paper producers the Nippon Paper Group. The firm has reported that equipment and stocks have been damaged at these sites.

However, there have been no significant price changes within the recovered paper market as a result of the crisis in Japan.

ACN Europe managing director Niels van Binsbergen said: “Their market will balance out because a lot of production has come to a halt. They are making fewer consumer goods, as all sectors and factories have been affected by the earthquake, so also the demand for packaging will be reduced.

“I’m not sure where China will replace the shortfall in recovered paper it may be experiencing because of Japan. It is unlikely they will buy from Europe because if they put the order in now they won’t receive the material for another six weeks due to the shipping time. In addition, European paper prices are too high for them to buy at the moment. Nothing is conclusive about how the Japanese recovered paper market will impact the rest of the markets at the moment.”

He added that the south of Japan is still exporting as normal, so China may not need to replace too much material.

Mark Lyndon managing director Paul Briggs commented: “There is still a lot of uncertainty in the market as to whether we will see an impact on from the disaster in Japan. We haven’t seen any dramatic impacts so far, which we thought if it was to happen, would have happened by now.” Briggs agreed with van Binsbergen that it’s possible the Japanese paper market has now balanced itself out.

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