RISI China Conference: Fully recovered?

China’s paper packaging sector is projected to keep growing, but whether it can continue to count on more imported scrap paper tons from North American and Europe as feedstock was a topic of discussion at the 2015 RISI China International Recycled Fiber Conference. The event took place in early December in Shenzhen, China.

Marc-Antoine Belthé of Paris-based Veolia Environnement SA said both the production of finished paper and the collection of recovered fiber in Europe “is stabilizing after a decline from 2010 to 2013. He referred to a European Union (EU) recovered paper collection volume of 62 million metric tons per year as “stable.”

Because of the large number of imported boxes streaming into Europe (primarily from China and other parts of Asia), the EU old corrugated collection rate is estimated to be as high as 127 percent—a figure that will be very difficult to improve upon in the future.

Belthé said recovered paper quality in the EU “is quite stable [and] even improving” and that rates for grades beyond OCC “are already very high.”

Another factor that may limit the EU’s ability to increase its supply of recovered fiber to China is the growth of Europe’s waste-to-energy (WtE) sector. “WtE will keep expanding in Europe,” said Belthé, who described it as “starting in the north and is now going to central and southern Europe. It represents real competition.”

The series of limiting factors on EU scrap paper exports to China caused Belthé to summarize that buyers of recovered fiber “could confront some challenging times over the next few years.”

Bill Moore of Atlanta-based Moore & Associates described conditions in the North American scrap paper market that may put a ceiling on exports from that part of the world as well. Recycling rates that are already high, said Moore, means “as recovery rates go higher, each new ton of material recovered costs more to get out of the waste stream.”

The introduction of the Green Fence initiative by China in 2013 has helped improve the quality of recovered paper in the U.S. said Moore, although operators of single-stream plants continue to contend with contaminants such as plastic film, glass and off-spec fibers.

With the decline of ink-on-paper reading, Moore noted, “We’ve lost 24 million tons of papermaking capacity in North America in the past 15 years.” Yet, because of a higher percentage of recovered fiber used as feedstock, the consumption of scrap paper in the U.S. nonetheless grew from 26.4 million tons in 2008 to 27.9 million tons in 2014.

The 2015 RISI China International Recycled Fiber Conference was Dec. 2-4 at the JW Marriott Hotel in Shenzhen, China.