RISI Containerboard Conference: World of paper keeps turning

The evolution of the containerboard sector in the People’ Republic of China since that nation banned scrap paper imports at the start of this year was a prominent theme at the 10th Asian Recycled Fiber and Containerboard Conference. The early December RISI Fastmarkets event is being held in Wuhan, China, and online for those unable to attend in person.

However, another prominent theme brought out in presentations and panel discussions was the vibrancy of the global scrap paper trade (and the strength of prices) in the immediate aftermath of China—for many years the world’s largest buyer—leaving the global market.

Figures presented by Brett Biggers, senior economist with the Washington-based Institute of Scrap Recycling Industries (ISRI), indicate scrap paper exports from the United States increased by 14 percent in the first nine months of 2021 compared with the same timeframe the prior year.

Helping absorb the recovered fiber surplus in the U.S. have been buyers in several nations, although India stands out as the largest volume buyer. The nation has recorded a 134 percent increase in tonnage purchased from the U.S.

Mexico and Canada also are among the 10 largest volume U.S. recovered paper buyers in 2021, but then seven more Asian countries join India on the list. Buyers in both Thailand and Vietnam purchased more than 1.3 million metric tons of material in the first three quarters of 2021.

Those two countries, along with others in the Association of Southeast Asian Nations (ASEAN) region, are among places where recycled-content pulp is being made from imported old corrugated containers (OCC) and other grades. That pulp often is then shipped to containerboard mills in China, said panelists and presenters.

Shawn Wang of Fastmarkets RISI, who moderated a panel discussion, acknowledged that in 2017, when China’s looming ban was announced, many observers thought scrap paper in North America and Europe might soon be headed to the landfill. Instead, she commented, “U.S. exports have increased [and] that is so different from our expectations.”

Fastmarkets RISI Senior Economist Hannah Zhao said mixed paper values indeed headed to zero in early 2018, but any landfilling of even that grade “has ceased.” Her colleague Echo Xu commented that with the ban in place in China in 2021, it served to “fundamentally change the flow of scrap paper” globally and changed “the direction of investment” in China and elsewhere.

India is importing more fiber not only to feed its own paper and board mills, said Xu, but also to produce rolled recycled-content pulp that is being exported to China. Some of this product is likely “imported under a finished paper code,” Xu said, so it is not always tracked in recycled-content pulp flow figures or maps.

Large tonnage recycled-content pulp facilities in Thailand and Malaysia also have helped supply Chinese containerboard mills. Since July 2020, the recycled pulp price “has increased dramatically,” she said. Xu added that it is not being purchased for its low cost but instead plays a role as “a fiber supplement” for mills in China.

While scrap paper collectors and traders can be pleased that they have weathered the initial turbulence caused by China’s ban, they likely will continue to deal with tighter specifications and potentially costly inspection procedures in other nations.

In the panel discussion at the conference, Candy Chen of trading firm Vecycle Ltd. said the inspection procedures put in place in Indonesia make it “highly complicated” to complete export arrangements to that destination at a time when making shipping bookings that stay in place already is a difficult endeavor.