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Quality Can Overcome

Market Reports - Paper

Recyclers have compared notes and worked with Chinese officials to navigate through the Green Fence.

RTGE Staff August 9, 2013

With several months having passed since China’s customs and inspection agencies enacted Operation Green Fence in February, recyclers are beginning to both compare notes and hear from the Chinese government to help figure out how to proceed.

At the 2013 Paper Recycling Conference Asia event, held in Shanghai at the end of May, several speakers referred to Operation Green Fence and the difficulties it had created for traders of recovered fibre in recent months.

Sarah Feng, a recovered paper senior analyst with UM Paper, a RISI subsidiary in China, noted that some mills had suspended importing the mixed paper grade as one response to try to meet a 1.5% contamination threshold being enforced by customs inspectors.

Both mills and suppliers are being affected by having to pay demurrage and additional shipping costs, said Feng.

Vivian Ou of Ralison International, Diamond Bar, Calif., said the situation can be frustrating but manageable. “I saw clean bales at the plant of one of our large suppliers, but they were probably not clean enough to pass the new customs standards. I can buy them, but China won’t let them in.”

Ou said that while it might be hard for suppliers to change by adding extra personnel or additional processing steps, “They have to face this, and most of our suppliers are making changes.”

The suppliers have to change for the sake of their own profitability, she commented. “They told me how much money they’ve lost in the last two months,” Ou said of one supplier.

Quality and its relationship to Operation Green Fence also was a topic at the Paper Division meeting of the Bureau of International Recycling (BIR) at the group’s World Recycling Convention, which also met in Shanghai in May.

Exporters from the U.S. and Europe must not only put quality at “the top of every business agenda” when supplying recovered fibre to Asia but also must increase their focus on the specific quality requirements of the individual receiving country. That was the observation of outgoing BIR Paper Division President Ranjit S. Baxi of U.K.-based J & H Sales International, London.

Baxi said China is enforcing its long-established material classifications, and while consumers in that country did not expect foreign suppliers to achieve zero prohibitive materials, neither were they prepared to accept 10% wax-coated paper, as an example.

He also commented that China’s annual recovered fibre imports topped 30 million tonnes for the first time in 2012 and that this growth “is going to continue.” Slightly more than 30.08 million tonnes of fibre were imported in 2012 compared with 27.28 million tonnes in 2011.


An increase in domestic collection, however, meant that imports now account for around 40% of China’s recovered fibre requirements, compared with more than 48% in 2005. That statistic was offered by Minnie Kong, Shanghai-based associate economist for fiber at RISI. Just as China’s Green Fence policy was temporarily hurting exporters in the United States and Europe, it also was apparently creating problems for Chinese mills that rely on imports, she noted.

On a brighter note, Kong insisted that recovered paper demand would continue to grow throughout Asia. Over the next year or so, “OCC will register the largest tonnage gains,” she continued. “Mixed paper usage may also grow as the cheaper substitute for OCC and other grades.” Demand for high grades in making printing and writing paper and white board may also increase, she said.

However, somewhat less positive news was contained in the European market reports delivered by Jaroslav Dobes of Remat SRO in the Czech Republic and Jean-Luc Petithuguenin of Paprec in France. Fibre prices and collection volumes remained under pressure in many instances, it was suggested.

European Recovered Paper Association and BIR Environmental and Technical Director Ross Bartley confirmed ongoing obstacles to securing end-of-waste status for recovered fibre at the EU level. Guest speaker Daniel Guillanton, export manager at SITA Negoce, France, emphasized that achieving this end-of-waste goal would be helpful not only in terms of managing quality, but also for improving record-keeping.

Fellow guest speaker Alan Bog, commercial manager, Asia, for Euroports Asia Terminals, said recovered paper exporters face “bottleneck” issues when shipping orders overseas. Some examples of these issues include as irregular supply of equipment, surcharges applied at the “whims” of carriers and general uncertainty over transit times owing to slow-steaming and multiple stops.

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