EUROTUBE 2017 in Copenhagen : Effects of the Chinese regulations on the recycled paper market

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The European Core and Tube Association (ECTA) held its annual General Assembly (GA) September 2017 in Copenhagen, Denmark.

After 12 successful years as chairman, Mr Jörg Elfes retired and the members of ECTA thanked him for his outstanding work. The General Assembly elected the two long time board members Mr Kurt Moser (Hülsenfabrik Lenzhard) as new Chairman and Mr Adam Wood (SONOCO Alcore) as his Deputy. Mr Peter Geiger (GROSS HOF GmbH) was elected as new member to complete the board.

One of the main topics during the whole GA was the current situation on the recycled paper market. ECTA predicts no relief for the purchasers during the next months as the capacity on the market is very limited.

This estimation was approved by Mr Henri Vermeulen (Smurfit Kappa), who was invited by the ECTA to hold a presentation on this topic. He stated that, beside North America, Europe is the biggest exporter of recovered paper with a volume of around 8 million tons. On the other side China is the biggest importer with around 28.5 million tons, so the effect of Chinese regulations, for example the current import ban on unsorted waste paper, to the European paper industry is quite significant. The enormous deficit of the paper trade balance of China will remain in the medium-term.

That leads to the expectation, that as soon as the import licenses for those recycled paper that is not effected by the ban will be granted, which is expected within the next weeks, the demand of China will increase immediately.

Mr. Vermeulen expects an enormous effect to the prices for OCC on the global market. As the supply chain is currently empty the future short-term demand of China is expected to increase the prices substantially. Even if the Chinese demand for recycled paper will decrease in the future, the requested amount by the other Far East region is expected to increase likewise. Additionally the development of the European surplus of the paper trade balance is likely to decrease as expected new containerboard capacities are coming online soon.

Therefore the ECTA expects near-term an increasing shortage of resources and again a relevant price increase for the recycled paper in Europe.

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