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Paper recyclers have experienced a lot of change in recent years, and more change is to be expected to come in 2021.

December 1, 2020

Since late 2019, scrap paper recyclers and traders have talked about China’s possible ban on scrap paper imports. This spring, China announced such a ban would go into effect Jan. 1, 2021. That date is only weeks away.

In recent years, China has been importing primarily double-sorted old corrugated containers, also referred to as No. 12 OCC. In August, export demand for No. 12 OCC increased, driven by Chinese mills trying to meet their recovered fiber import quotas. But by early October, prices for No. 12 OCC decreased quickly, indicating China was winding down recovered paper imports.

Recycling Today editors have had many conversations with recyclers and brokers on the topic of China exiting the market for scrap paper. Many of these businesses say they have been preparing for China’s exit from the marketplace and have found new homes for scrap paper, either stateside or abroad. Therefore, China’s ban on scrap paper imports might not have too big of an effect on those recyclers and brokers.

During the Outlook for OCC roundtable at the Paper & Plastics Recycling Conference International (PPRCi), a broadcast event that Recycling Today hosted online Oct. 20-22, Shawn Logan of Waste Management Recycling said his company had significantly reduced its exports to China. “Today, [China] constitutes low single digits of what we export. So, kudos to our export department who has worked tirelessly over the last five years to develop alternative markets—Southeast Asia, India, the Middle East, Europe and South America to name a few big ones we pursued aggressively.”

Looking ahead, 2021 will be a new chapter for scrap paper markets.

While recovered fiber destinations will shift next year in response to China’s exit, this does not mean China will stop making boxes. During the PPRCi, Bill Moore of Moore & Associates said China will have a 13 million- metric-ton fiber shortage next year. The country’s papermakers will make up some of that shortfall through domestic recovery and by importing linerboard, medium and containerboard. Chinese companies also have been increasing imports of unbleached recycled fiber pulp.

Political factors also could affect U.S. scrap paper markets in 2021. It’s expected that Joe Biden and his administration will transition to leadership in January, which likely will have an impact on the economy that could affect scrap paper markets.

Optimism is growing that the pandemic could come to an end in 2021, as well. In mid-November, Pfizer and Moderna announced promising vaccine trial results. Even if the pandemic lingers, the scrap paper market has not been too adversely affected by it. Many containerboard producers that consume scrap paper also have reported positive earnings results in the latter part of this year.

This past year was filled with uncertainty. While geopolitical uncertainty lingers, change certainly can be expected in the new year.