First Import Permits for Recovered Paper in China Larger and Earlier Than Expected

It has been a rollercoaster year for recycled paper markets around the globe as many exporters scramble to find destinations other than China for their wastepaper.

Perhaps indicating an attempt to stabilize its domestic recovered paper (RCP) market, China issued a first round of import permits earlier than expected. On December 14, 2018, China’s Ministry of Ecology and Environment issued a total of 5.04 million tons of wastepaper imports. This is more than the first six batches issued in 2018 combined.

In a continuing trend, most of the permitted volume of wastepaper imports went to the largest recycled cardboard producers in China: Nine Dragons Paper, Lee & Man Paper Manufacturing, and Shanying International Holdings.

Despite increased restrictions on imported wastepaper sorting and quality, announced early in 2018, China is still the top importer of U.S. recycled paper. China imported 2.73 million tons of U.S. cardboard during the first half of 2018 and 1.4 million tons of all other U.S.-sourced recycled paper products.

In the third quarter of 2018, U.S. average mixed paper prices inched up from $4.17 to $5 per ton, and average old corrugated cardboard pricing rose from $70.28 to $71 per ton.

The growing global use of e-commerce will likely support the demand for mixed paper and old corrugated cardboard, which are the source materials for the shipping containers for e-commerce products. United Parcel Service estimated that it handled over 800 million packages during the 2018 holiday season, according to the company’s vice president of U.S. marketing, Kathleen Marran.

In response growing need for materials posed by the new restrictions, Nine Dragons Paper and Shanying International Holdings purchased U.S. paper mills in 2018. This could allow the companies to import products and waste material back to China without paying potential tariffs.

In addition, the Material Recovery Facilities (MRFs) here at home are installing equipment to weather the quality storm. We have just assisted in a retrofit of another major MRF in California which will immediately alleviate the pressure that the new inspection and quality requirement have imposed on the US recycling plants. These upgrades include but are not limited to glass removal and cleanup systems, optical sorters for the paper lines, additional screening technology, paper balers, and other equipment. Let us help you upgrade your system today.

Berg Mill has a long history as one of the pioneers in the industry, and we are not going anywhere even when faced with recyclable import change. Our feeling is that the market will bounce back but it won’t happen overnight. With Chinese New Year coming buyers will look to avoid landing containers during this two-week time. After this dust has cleared, we do believe the rebound will come.

2018 was a learning experience for many and we are ready for what is to come – bring on 2019! We are continuing to make progress here at home, in Southeast Asia, and China for your paper, plastic, metal, textiles, etc. If you continue to handle large amounts of recycled waste and are looking for solutions to offload idle scrap, please contact our industry veterans at Berg Mill Supply.

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