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UK paper mills aiming for stability

Paper recycling companies have responded to claims in last week's edition that the UK industry is 'dead and buried' by suggesting stability is their main aim.

UPM-Kymmene purchasing manager Craig Robinson said: "At the moment, China will invariably offer higher prices. This has been predicted what with their investment plans. Demand is huge.

"The UK paper mills look at supply over the long-term, looking at stability, while the merchants will make their money on movement in the market. We are in an all-together different business. We have customers and have to supply to their demand."

Robinson suggested that the UK has limited capacity to deal with all the waste, so invariably lower prices will always be offered because there is a surplus.

This is a view backed up by Newport Paper Company commercial director Matthew Hoare, who said that in Europe, the market price is set. It is dictated by supply and demand.

The company has signed a deal to supply Langerbrugge in Belgium, which is the biggest single mill in the world and will take up to 700,000 tonnes per year when up to full speed.

He said: "We try and offer stability to merchants by guaranteeing prices over a quarterly basis. But if a mill breaks down for a week, that creates an over-supply, and this is felt all over the country with prices going down."

Hoare suggested that this could affect overseas business to the UK also. He used as an example that if a big US mill broke down for a week, creating an over-supply, there would be nothing to stop Chinese company's picking up cheap tonnage there and leaving UK merchants in the lurch.

He admitted that with the amount of waste we create, we do need the Chinese companies, but prices offered in the UK will not invariably remain lower.

"If projects such as Langerbrugge start going like the clappers, any UK over-supply will be sucked up and we will recommend prices be put up."

"We do try and offer stability and have signed a five year contract with a local authority, meaning we have to take the tonnage come hell or high water."

Robinson and Hoare both agreed that their business is about sustaining it for the future, while merchants are opportunists capitalising on movements in the market. They aim to be around for the long-term, while nobody can accurately gauge how long there will be such massive demand from China.

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