As 2017 came to an end, the recovered paper stock industry attempted to prepare for changes expected, and unexpected, in 2018.
For one, the Institute of Scrap Recycling Industries (ISRI), Washington, issued an alert to its members dated Dec. 11, 2017, updating them about its recent meetings in Beijing with Chinese and U.S. government officials and its industry association counterparts. The association also offered guidance to its members regarding implementation of China’s new import rules.
ISRI suggests that its members be vigilant when loading containers to avoid including dirt, wood, concrete or other materials or even recyclables that do not belong in that particular load. The association also advises including more photos and thoroughly documenting the condition and contents of shipments before export. It also tells its members to expect rejections.
Additionally, ISRI encourages its members to keep records of their experiences, including reasons given for rejections, and to share this data.
In response to ISRI’s meeting with Chinese government officials, Simon Ellin, CEO of the U.K.-based Recycling Association, says, like ISRI, the European association is reminding its members to keep material clean, take more photos and be prepared for rejections.
Ellin refers to the situation as “potential chaos” in a December news release.
“The discussions ISRI has had with the Chinese government highlight a lot of concerns we have had that the ban and greater restrictions on imports
A trader based on the U.S. West Coast warns that just because China is buying recovered fiber, it does not mean rejections will ease up. As ISRI anticipates, rejections will become more frequent.
“What are these guys going to do when they open the containers and see a plastic bottle in the back of a container? [The Chinese inspector] can close the doors, get the container out of here, take the other 20 containers and move them somewhere else. It’s a six-figure mess, very easily,” the trader says. “There still is going to be sizable risk shipping to China.”
Compared with November, Chinese consumers paid more in December for sorted residential paper and news (SRPN), sorted office paper (SOP) and old corrugated containers (OCC), with the exception of a drop of $5 per ton FAS (free alongside ship, meaning the seller must deliver goods to a named port alongside a vessel the buyer designates) in New York for OCC, according to the Dec. 5 PPW Yellow Sheet from Boston-based research firm RISI. Mixed paper prices to China dropped across the board in a range of $2 per ton to $15 per ton.
Domestic pricing for recovered paper was mostly flat, except for movements in the West: SOP increased $5 per ton in Los Angeles; SRPN hiked $10 per ton in the Southwest, Los Angeles and San Francisco and $5 per ton in the Pacific Northwest; OCC declined $10 per ton in the Southwest; and mixed paper increased $10 per ton in the Southwest and dropped $5 per ton in Los Angeles, San Francisco
At a U.S. average price of $29.45 per ton,
“All I’ve heard from other people is that they expect the market [in 2018] to be hotter than hell.” – a trader based on the West Coast
OCC wrapped up the year at $104.72 per ton, having dipped below $100 per ton just once in
Looking ahead, a recycler based in Midwest says, “We expect it to be outstanding,” regarding the start of 2018.
The trader based on the West Coast also has a positive outlook. “All I’ve heard from other people is that they expect the market [in 2018] to be hotter than hell,” he says.