Just recently, China announced additional regulations that officially prohibit the import of all mixed paper by December 31st of this year. On August 16th, China updated the “Catalogue for the Administration of the Import of Solid Waste” to include custom codes 4707900010 and 4707900090, which pertain to mixed paper.
The prohibition covers four classes and 24 different types of recovered commodities, from plastics to textiles. China’s World Trade Organization (WTO) filing calls out specific materials using international trade codes, including:
- ethylene (HS 3915100000)
- styrene (3915200000)
- vinyl chloride (3915300000)
- PET (3915901000)
- other plastics (3915909000)
- unsorted waste paper (4707900090)
Alternative markets expand as China closes door on more recyclables imports
China’s ban will hurt many US exporters; however, alternative markets in areas including the Middle East, Latin America, Bangladesh, India, Pakistan, and countries in South East Asia have seen significant increases in import volumes, suggesting there is still hope for US merchants to at least bolster business as the market settles.
As far as recovered paper (RCP) markets are concerned, exporters should keep an eye on Vietnam. Though the country’s local RCP recycling infrastructure is still underdeveloped, expansions in packaging production by Asian producers signal the potential for a robust market.
Nine Dragons Paper Holdings, for instance, recently began new trial runs on a board machine operated by their subsidiary Cheng Yang Paper. Technicians fine-tuned the machine after initial tests were conducted earlier this month.
Referred to as the PM 2, the machine is 6.66 meters wide with a speed of 1,300 meters per minute and has the capacity to process up to 500,000 tons of recycled containerboard per year.
The board machine is fed by stock sourced by RCP trading giant America Chung Nam, an affiliate of Nine Dragons.
Production using the PM 2 was initially intended to begin in 2015; however, intense anti-China riots flared up in Vietnam in May 2014, about a year after Nine Dragons announced the project. As tempers subsided, the company decided to move forward, securing $168 million in loans in 2016.
Other cardboard manufacturing leaders will also be expanding operations in Vietnam, including Taiwan-based Cheng Loong which ordered a 260,000 ton per year machine slated for start-up early 2018. The company intends to invest $1 billion into their Binh Duong facility with the hope of increasing capacity to 1 million tons per year.
If you generate, handle, or process waste and would like to strengthen your position in this uncertain market, please contact our industry veterans at Berg Mill Supply. As we have done in the past, Berg Mill continues to work hard on creating solutions to overcome fluctuating commodity markets, including opening markets in other countries, forging strategic alliances, and improving domestic processing capabilities.