Delays in re-licencing mills in China have driven a sharp slump in prices for paper and cardboard.
The issue is separate from disputes about the country’s imposition of low contamination levels on imports, which have disrupted exports of recyclables there this year.
Mills need licences from the Chinese authorities to import material and these have expired in the past few months.
It means that material cannot be exported there and so MRW’s price guide has recorded a range of £65-£130 a tonne for OCC compared with £95-£150 this time last year.
Eurokey Recycling director Andrew Smith told MRW that the top price had come down sharply in the past three weeks.
He said: “Every mill in China has to reapply and so no mill there can import OCC at present, and agents in the UK cannot accept any orders to China.”
Smith said the re-licensing process happened each year but, since the introduction of China’s National Sword anti-contamination measures, “it is being implemented to the letter, dotting Is and crossing Ts”.
He added: “The top price I get is £117 a tonne. I hope it will be sorted out in three or four weeks.”
Simon Weston, director of raw materials at the Confederation of Paper Industries, said: “We are well aware of the impact of the failure to renew these licences.
“Prices are dropping sharply, although I think if there are high-quality materials out there, they will be sold. But some local authorities and others seem to be going in the other direction of getting low-quality stuff and sending it to landfill or incineration.
“Mills in China need licences and there is some conjecture as to whether, if they are renewed, they will be at the same volumes as before. The Chinese say they want to be self-sufficient and not import any material. It’s a matter of how hard the market falls.”
The Recycling Association this month launched an export quality control scheme for paper material heading to China, developed with CCIC London, a third-party certification and inspection organisation affiliated to China Certification & Inspection Group.