Chinese restrictions have caused paper exports and prices to plummet as new quality restrictions eliminate a key market.
The average mixed paper price for domestic and export now stands at around £50 per tonne, down £10 on the past month with further falls expected.
The price has seen a 50% reduction since the news of China’s intention to ban certain materials was announced back in July.
One merchant said that alternative markets were not a long-term solution to the disappearing Chinese market.
Exports of mixed papers were down 16% in October when compared with the same month the previous year, according to figures from HMRC and the Confederation of Paper Industries. This was a fall of 24,053 tonnes, and overall tonnage for the year was down 10% against 2016 figures.
Some mills were late to be granted import licences and, as a result, there was a lack of buying and prices fell accordingly.
Recovered paper merchants still felt that the market was a guessing game, with many waiting to see how it will play out in the coming months.
Both domestic and export OCC prices have softened by £10-£20 per tonne during the past few weeks, achieving around £110 per tonne.
Although OCC export tonnage was down by 31% in October compared with September, representing a drop of 88,000 tonnes, the overall tonnage for the past year was flat.
Keith Trower, Viridor managing director, said in the most recent BIR World Mirror that the Chinese will need a huge push with their domestic collection infrastructure to keep feeding their mills if the import policy remains the same.
He added that this set of circumstances was also likely to lead to investment in paper mills in other countries such as Vietnam and Indonesia during the next five years.
- Read MRW’s recovered paper market report in the next issue, out 31 January