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Recovered paper – that ‘giant sucking sound’

By Rod Young Fri, Apr 23, 2010
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As Ross Perot might put it, there's a ‘giant sucking sound' of recovered paper moving into China. Indeed, demand for recovered paper faltered around the world in 2009 with the recession, but not in China ...it's appetite for the stuff is insatiable!

Here's a tidbit that might surprise you: Did you know that the global number one consumer of recovered paper is now a Chinese company?

China will account for three quarters of the future growth in demand, and by 2014, will represent over a third, or 90 million tonnes of worldwide consumption. And whilst governments and papermakers attempt to boost domestic recovery of paper in China, this will not meet forecast demand, since much is used for packaging goods which then leave the country. Can you hear that sucking sound?

Although higher prices for recovered paper and growing environmental concerns will boost the recovery rate, the limits of what can be recovered from the waste stream are being tested in the developed world. With Chinese imports expected to grow two million tonnes per year, Asian papermakers will have to search worldwide for new supplies. Prices will thus continue to rise for all grades of recovered paper, but by China scouring the world for imports to meet its demand, it will help keep export prices consistent across the globe.

With rising prices for recovered paper, along with huge increases in demand, there will be much activity in this industry over the next five years.

I have just finished working with Bill Moore, Esko Uutela and Hannah Zhao on the study,Outlook for Global Recovered Paper Markets, which looks at the recovered paper market in great detail from 1992-2014.

 

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