PRC India: A bigger piece of the pie

Throughout the 21st century, China has established and consolidated its position as the leading destination for scrap paper exported from the United States.

 

Two of the largest U.S. scrap paper exporters, however, told attendees of the 2015 Paper Recycling Conference India event, held in New Delhi in late January, that India’s share as a recipient of that fiber is likely to grow in the next several years.

 

At a session on U.S. recovered fiber supply, moderator Bill Moore of the consulting group Moore & Associates, Atlanta, said annual paper and board production in the United States has declined since 2007, although recovery percentages have increased. The booming paper producers in China have absorbed much of that recovered fiber over the past 12 years.

 

Peter Wang of America Chung Nam (ACN), City of Industry, California, the purchasing arm of China’s Nine Dragons Paper, said Chinese mills purchased 75 percent of the scrap paper exported by the United States in 2014, or 11.5 million out of 15.3 million tons.

 

While China remains the largest importer of U.S.-generated recovered fiber, “India does play a strong role in the export market in the U.S.,” said Wang. He noted that while China brings in 68 percent of its U.S. fiber from the Pacific Coast, India helps keep Atlantic Coast exporters busy by procuring 99 percent of its U.S. supply from the East Coast.

 

The trend toward India having greater influence on the East Coast is growing, said Wang, noting that from 2012 to 2014 “China has reduced its [purchases] by 284,000 tons, while India is up by 262,000 tons in that same period.” Added Wang, “India pretty much picked up anything China stopped buying.”

 

Ashu Vyas of Cellmark Recycling, San Rafael, California, also stated that recovered paper exports to India are increasing “and we expect this trend to continue for some time.”

 

Vyas said a perceived blurring of specifications and grades in categories such as old newspapers (ONP) and old corrugated containers (OCC) are of concern to Indian buyers, with some grades preferred by the market “all but disappearing.”

 

However, India’s fragmented paper mill sector relies on “customized” grades rather than “commoditized” grades, added Vyas. “Cellmark has so many grades for the Indian market,” he commented. “Special arrangements are common for Indian mills.

 

Factors including credit terms, shipping flexibility and the fragmented market all will affect the relationship between U.S. recyclers and Indian paper mills, said Vyas. Concerning India’s preference for custom-specified grades, Vyas commented, “This desire will influence the availability of U.S. supply.”

 

Paper Recycling Conference India  was held Jan. 29-30, 2015, at the Taj Palace Hotel in New Delhi.