The Global Recovered Paper Market

According to USA-based market intelligence company Beroe Advantage Procurement B.V., the global recovered paper demand, which was predicted to be about 250 million metric tons in 2018, is expected to increase at a compound annual growth rate (CAGR) of two to three percent until 2021.

As reported, Asia – dominated by China and India – is still the major growth driver. The USA and Europe are the prime exporters of recovered paper, globally. However, these regions are witnessing negative or minimum growth rates after the import restrictions in China. Besides, “the sustainability regulations in China have become a major challenger for the global recyclers,” the company emphasized. “The domestic recycling rate in China is expected to increase, due to the shortage of imports.”

Regarding the end-use market, Europe and the Asia Pacific are the major regions that use recycled paper for containerboard production. “While 95 percent of the total containerboard produced in the Asia Pacific (APAC) is made from RCP (Recovered/Recycled Paper), the value is 82 percent for Europe (combining Western Europe and Eastern Europe),” Beroe stated. Similarly, for boxboard, 67 percent is recycled in the Asia Pacific area, whereas in Europe it accounts for 51 percent of the total boxboard produced.

“The demand for newspaper and printing and writing paper has been on a continuous decline in the developed regions, and its share is expected to decrease even further by 2019,” market intelligence said. The tissue share is expected to increase, mainly driven by the developing regions, like Asia Pacific and Latin America.

On regional cost structures of recovered/recycled paper, Beroe found that the cost of raw material is lower in exporting countries “because of the ease in availability of raw materials”. In Asia, owing to the low recovery rate, raw material would be imported from these regions, pushing the share higher. “On the other hand, labor availability and average labor costs are much lesser in Asia compared to North America and Europe, bringing the labor cost contribution down,” the company stated. “Other costs constitute to various verticals, like marketing, sales and distribution, general administration, and financing.”

(GR 32019, Page 11, Photo: O. Kürth)