Recovered Paper Markets: New China Rules Could Add to Volatility

A new study, authored by RISI Economist and Recovered Paper expert Hannah Zhao, analyzes the drastic evolution of recovered paper (RCP) volumes and composition since 2000, and forecasts how these trends will shape global markets through 2030.

In April, China announced new policies to control imports of solid waste – including recovered paper. According to the information, China imported around 28.5 million tons of recovered paper in 2016, and 20 percent of this was mixed paper. “Mixed paper is reported to have the most contaminants among the major recovered paper grades,” explains Hannah Zhao, and “it is likely that mixed paper could be labeled as ‘prohibited’ if the quality issue cannot be solved”. Therefore, it is estimated that RCP markets, which have already seen major price swings in 2017, could be further disrupted by China’s new policies. 35 percent of China’s mixed paper imports come from the US, and 60 percent of US mixed paper exports went to China, RISI reported.

The US paper market has rapidly evolved in recent years, which means that the recovered paper component mix has changed as well. Tissue and packaging consumption has grown, while newsprint and other graphic paper sales have dropped drastically. Single-stream recycling collection has also complicated the sorting process. These structural shifts are also reshaping the RCP markets. The component mix for old newspaper (ONP), mixed paper, and high grade categories are still in a state of flux – which means more uncertainty for the businesses that depend on RCP supplies. Beyond this core demand and supply analysis, this study also explores how the evolution of paper and board consumption and recycling systems will affect RCP prices and utilization in both paper and non-paper industries.

RISI’s study on “US Mixed Paper, ONP, and High Grade Recovered Paper: Trends in Availability and Quality” provides:
■ Demand, supply, trade, and price information
■ Historical data and forecasts
■ Factors specific to the major RCP grades, such as deinking and pulp substitutes
■ The impact of the changing mix on end users of RCP material, in both paper and non-paper industries

Photo: O. Kürth

GR 22017