The Bureau of International Recycling (BIR) is predicting a strong export market in 2017, with an increase in volume and price stability, despite the “biggest shipping container crisis the UK has ever witnessed”.
Simon Ellin, chief executive of the Recycling Association, said that, although there was a period of price stability in Q4 2016, turbulent events such as shipping and container shortages doubled freight rates.
Writing in the latest BIR newsletter, Ellin said the key factors for the overall price stability were strong Chinese demand, a lack of material on the water, agreement on import licences and relatively weak sterling.
He said the shortage of vessels arriving in the UK was due to a mixture of Chinese holidays, bad weather and also ports holding containers following the bankruptcy of Hanjin shipping line.
Although falls in newspaper grade prices are described as “unusual and probably unsustainable given the strong European and Chinese demand for mixed papers”, they reflected the “diminishing global demand for newsprint grades”.
Ellin said other grades had fared better, demand for high-quality mixed paper had become “very good indeed” while the middle grades of multigrade, sorted office waste and office pack remained “healthy”.
The UK had become a market leader for quality, he added, claiming that “quality material has been proven to be sustainable and premium prices can be obtained”.
“The market is expected to maintain its strength in 2017,” he said.
Also writing in the newsletter, Ranjit Baxi of J&H Sales International said demand was strong for fibre during the final quarters of 2016. He pointed towards increasing global demand for 2017, but warned that exporters faced increased shipping rates this year.
Baxi noted: “The Hanjin bankruptcy, the realigning of shipping alliances and the possibility of mergers have greatly affected both availability of containers and shipping space, resulting in sea freight rate increases and delays to shipments during last year’s final quarter.”
Demand for mixed paper is described as very good, in contrast to the same period of 2015, when there was low demand from China because of moisture and quality issues.
Baxi said that export volumes would grow in 2017, continuing the trend set in 2016 from other Asian markets such as India, Indonesia and Vietnam, which continued to gradually increase their import volumes, with a steady upturn in prices.
“Exporters are looking forward to a shift to stronger market demand following the Chinese New Year,” he said.