In an effort to keep you informed and up-to-date, we wanted to share this recent letter from Barry Froman, owner and president of Recycle 1 in Arizona. This letter was emailed to all our paper suppliers and features timely and important information about the current state and anticipated future conditions of the international waste and recovered paper market. Be sure to stay tuned to our website, where we’ll continue to keep you posted on market conditions.
Our valued customers and suppliers:
At the end of the year, I’m back to share some major news happening in China.
It’s being reported that the Chinese government has taken steps indicating it will likely implement an all-out ban of imported OCC and almost every other fiber grade by 2021. Officials at the China Paper Association (which represents the country’s paper industry) has said China will continue to reduce the number of import permits in 2020, working towards completely eliminating these permits in 2021.
This ban will continue to frustrate U.S. exporters of fiber product, as well as Chinese paper makers and other consumers of recovered fiber in China due to a lack of supply.
Their solution for these Chinese paper companies? They are looking elsewhere in Southeast Asia to set up operations, moving to process raw fiber outside of China, then transport the finished pulp into China for use in fiber products. There are a number of logistical challenges to this fix (for starters, transport times are a concern), and there aren’t currently enough fiber processing plants outside of China who can meet the demand.
But while the ongoing and potentially total Chinese import ban is not good news, it’s meant some interesting things for the U.S. market. Namely, Hong Kong-based Nine Dragons (a massive consumer of recovered paper) has acquired several U.S. paper mills, with additional expansion plans. They intend to double pulp production capacity in the next year, to 1.61 million metric tons by 2021, with most of that increase coming from the recycled pulp produced at the U.S. mills.
As always, we’ll continue to keep you posted on the latest news in the New Year. Please contact us with any questions or assistance with your recycling needs.
Recycle 1 Companies