WasteExpo: China in the Driver’s Seat

The economic downturn caused some short-term turmoil in the market, but 18 months after the sharp downturn, demand for recovered fiber is global and relatively healthy.

At a session focused on paper recycling at WasteExpo, industry consultant Bill Moore of Moore & Associates, Atlanta, remarked that in just 30 years—from 1980 to 2010—the world went from consuming 50 million tons of scrap paper annually to 210 million tons.

A major component of that change was the rapid development of the paper industry in China. “When you boil it down by country, it’s China,” Moore says of the growth trend in recent years.

A forecast co-authored by Moore predicts that by 2014, China will import 35 million tons of scrap paper.
China’s demand should continue to keep OCC (old corrugated containers) in the $130 to $140 per ton range in 2010 and 2011, Moore predicted. He described the old newspapers (ONP) grade as “a supply-constraint grade,” and said ONP may remain at above $100 per ton because of lackluster supply.

Moore said that “China’s recovery rate is fairly high, but so much of what they make is put into boxes and exported” that even with its high recycling rate, it still needs to import material. Moore added that he does not see China becoming self-sufficient in sourcing recovered paper in the next 10 or even 20 years.

Vic Gaylor of Caraustar Industries, Austell, Ga., provided the perspective from a North American company that operates seven paper mills that consume recovered fiber and eight paper recycling plants.

Gaylor commented that China is “improving toward self-sufficient supply” and offered the example of Japan, which imported a great deal of scrap paper before eventually becoming a net exporter.

He also remarked that even though the U.S. has doubled its scrap paper exports from more than 10 million tons in 2002 to more than 20 million tons in 2009, “the domestic market remains the major consumer of U.S. recovered fiber.”

Gaylor also urged recyclers to continue to focus on the quality of their shipments. He remarked that mills such as those operated by Caraustar are investing to be able to pulp single-stream materials, but even so, “we can’t make paper out of Styrofoam or out of bottle caps.”

WasteExpo took place at the Georgia World Congress Center in downtown Atlanta May 3-6.