Although the economy of Europe in 2009 has been far from stellar and a quick rebound in 2010 is far from certain, the paper recycling industry may be one of the few economic sectors where demand will exceed supply.
A panel of speakers at the 2009 European Paper Recycling Conference offering predictions on the near future largely agreed that the global demand for recovered fibre will keep paper recyclers in Europe busy and scrambling to collect material in 2010.
Session moderator Bill Moore, Moore & Associates, Atlanta, noted that a downturn in prices was to be expected by late 2008 after a long upward spell, but that the “magnitude” of the sharp drop in demand and pricing could not be predicted.
The quick economic course correction taken by China has helped re-establish markets for old corrugated containers (OCC). Moore says several once-delayed containerboard plant expansions in China are now back on track, which could help keep demand for OCC globally strong. He foresees pricing for OCC hitting $110 per ton by the fourth quarter of 2010.
ONP (old newspapers) demand remains weak in the newsprint sector, but so does generation of the material. However, since collection through government programs remains steady, this grade may not rebound in price as strongly. Moore forecasts a price of $99 per ton by late 2010.
Office paper generation remains weak while its demand at tissue mills remains steady. That conflict should put upward price pressure on the grade throughout the near future.
Also speaking on the forecast panel, Henri Vermeulen of Smurfit-Kappa in the Netherlands noted that within Europe, production of and demand for packaging grades remains in a “solid position” while the newsprint sector is “facing some structural changes.”
Within Europe, Vermeulen said recyclers can expect to see “a lot of flows changing” with new mills in central and Eastern Europe absorbing recovered fibre that used to be available and “relatively cheap” for recyclers in other parts of Europe.
Stephen Armange of France’s Paprec Group noted that export containers are now more widely available to recyclers, although overseas freight rates in 2009 have soared from €250 to €850.
France, with a scrap paper recovery rate of 63 percent, can probably supply more fibre to the world, said Armange. Additionally, it may also be possible to improve upon the nation’s mill utilization rate for recovered fibre of 60 percent.
Rahul Kerjiwal of Kerjiwal paper Ltd., Mumbai, India, says his company will continue to procure recovered fibre for the 100-percent-recycled-content notebook his company exports around the world.
Kerjiwal said he is bullish on the future of paper mills that used recovered fibre. “I believe the paper industry of the future will be near major cities, not out in the forest,” he remarked. “I believe it is happening already. Hence, the future of recycling is very, very good.”
The 2009 European Paper Recycling Conference was held Nov. 16-17 at the Hotel Bloom in Brussels.