Global paper recyclers highlight an 80-90% drop in prices

Corrugated cardboard

During discussions at the Bureau of International Recycling (BIR) World Recycling Convention in Dubai, the Division President reported an 80-90% drop in prices for old corrugated cardboard (OCC) in recent months.

In his opening address, Division President Francisco Donoso, of Dolaf Servicios Verdes S.L. of Spain cited “extremely low demand” all around the world with high stocks at paper mills and the high cost of energy as reasons for the price drop.

He continued that producers cannot pass on this cost in their sales prices because demand for their products is also low, owing to the financial crisis, and neither can they reduce their energy costs. “Therefore, the only cost they can manage is what they pay for their raw material.”

In the USA, Mr Donoso said, prices for mixed paper had reached zero dollars in some locations and thousands of tonnes were being landfilled. He said that prices had fallen fastest in Europe and he anticipated further downtime, suggesting “it is difficult to know where the bottom is”.

The Indian position was set out by Nishant Sahney, Managing Director, Gaurav Vipa Papers Pvt Ltd in the UEA who said the high prices of more than six months ago had fallen away dramatically.

Ours is a very strong industry and we always come out stronger, even through Covid.

“We don’t have exports to China anymore because the Chinese are not buying pulp. On top of that, because of less demand in US and Europe, we are now competing with manufacturers from the Middle East and other Asian countries. Mills in India are now running at 70% capacity so that is why they cannot afford the prices of six months ago.”

In another presentation, Atul Kaul, Director at Pulp & Paper, Waraq in Saudi Arabia considered the recovered paper market in the kingdom and his company’s activity.

He summarised, that in 1996, production required 85% virgin paper but it had now swung around to using 85% recycled paper. In 1995, 80% of recovered fibre was exported with the rest being landfilled; whereas this year, 90% of recovered fibre is being consumed by local mills.

Striking a more optimistic note, President of the Global Recycling Foundation, Ranjit Baxi, called on the industry to be positive, saying that the paper sector has always proven to be resilient. “Ours is a very strong industry and we always come out stronger, even through Covid. Let’s not be upset by the price fluctuation; market demand will be strong, so let’s be positive.”

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