Recovered paper exports at decadal low
Australia’s total recovered paper exports continued to fall in May 2019, recording a year-end total of 1.134 million tonnes, their lowest annual aggregate in more than a decade. Down 19.0% on the prior year, IndustryEdge can confirm expectations that annual recovered paper exports will decline further over the next two to three months.
Our analysis indicates that on current trends, exports will fall to around 1.120 million tonnes before flattening out. That will result in around 250,000 tonnes of recovered material that will not be recycled.
As the chart shows, Unbleached Kraft exports – mainly Old Corrugated Cartons (OCC) – fell to 677.0 kt over the year-ended May. More than 23% lower than the prior year, the decline accounts for just over 200,000 tonnes. The other fibre specific grades – Mechanical (down 54% or 64,000 tonnes) and Bleached Chemical or office papers (down 61% or 46,000 tonnes) – are also down sharply.
Australian Recovered Paper Exports by Grade: Jan ’15 – May ‘19 (ktpm & AUDFob/t)
Only the Unsorted, Mixed or Other grade has experienced increased exports – up 14.6% or 47,000 tonnes over the year-ended May. It is important to note that this includes some material that in the past would have been sorted into the other grades. It is not all material collected from kerbsides.
So, why is this migration to ‘Unsorted’ exports happening? We need to keep in mind that so long as it is genuinely clean, recovered paper can be exported. In fact, the average price of the Unsorted grade lifted 8.4% from May 2018 to May 2019. At AUDFob199/t in May, that price is still well below the AUDFob236/t recorded six months ago, in November 2018.
IndustryEdge is aware that, at a local level, for some grades of recovered paper, there is little or no interest from local paper and board manufacturers. It has long been the case that liquid packaging board, for instance, has not been preferred in the local market. There are complex reasons for the preference (or absence of it), but it serves to emphasise the importance of strategies moving towards source separation.
Local interest in Old Newsprint (ONP) has changed over the years, even as the volumes decreased. Once of interest to paperboard producers (long fibres mean strong boxes) and newsprint manufacturers (for recycled Newsprint grades), now more ONP finds its way into single use pet litter than any other application.
It may seem bizarre, but the higher-value and best grades of ONP are often offered at prices too high for the traditional recycling supply-chain.
Edited extract of an item that first appeared in Pulp & Paper Edge in July 2019 (Edition 166)