Chinese paper mills had been relying on North America for 80% of its recovered fibre imports as recently as the year 2000, whereas in that same year volumes supplied by Western Europe had been negligible. And yet, by 2005, Western Europe had claimed a 27% share of a now much larger Chinese import market while North America’s contribution had fallen to 46%. Over the same five-year period, the share of Chinese recovered paper imports claimed by Japan had jumped from 1% to 18%.
These observations formed part of a keynote address from Bill Moore of Moore & Associates of Atlanta, USA, to the second annual European Paper Recycling Conference hosted by the US-based Recycling Today Media Group. Recyclers and mill buyers from 16 nations and covering almost every grade of paper gathered for the event, which was staged at the Hotel Tryp Apolo in Barcelona during late September. Speakers were drawn from nine nations, including multi-national enterprises such as Stora Enso, the Smurfit Kappa group, Europac, Sonoco and America Chung Nam (ACN). Sponsors included: the Confederation of European Paper Industries (CEPI); the UK-based Independent Waste Paper Processors Association (IWPPA); recovered paper giant ACN (Europe); consulting firms Moore & Associates and Pira; and German-based publication EUWID Recycling and Waste Management.
Having noted that the rate of China’s purchasing in Europe was still on the increase, Mr Moore pointed out that the country’s mill operators were now establishing buying arms in Europe - ‘as they did in the USA in the late 1990s’. With only 4% of the world’s forests located in China, the country’s paper industry has had to look elsewhere for its fibre requirements. According to Kevin Duncombe, President of Western Pacific Pulp & Paper (WPPP) in California, the Asian giant now consumes 53% of all US fibre exports. He also acknowledged that the flow of fibre from Western Europe to East Asia had increased massively over recent years. In this context, he called on Europe’s paper and board recyclers to ‘look domestically first’ - but without ignoring export market opportunities. Mill consumers closer to home would be ‘happier customers if they can count on you month after month’, he suggested.
More closures likely
The surge in European exports to Asia also attracted comment from Paul Briggs of Sonoco Alcore Recycling Europe, which is based in the UK town of Halifax. Thanks to the combination of consistently strong demand from China and domestic mill closures, the UK had recently reached a watershed where it was ‘exporting more material than it consumes’. The speaker’s figures indicated that, over the last six years, 36 mills with a combined 1.6 mil-lion tonnes of capacity had shut down in the UK - and that more closures were likely. In the first three quarters of 2006 alone, the UK had announced the closure of a further 500 000 tonnes of paper and board capacity, he reckoned. ‘From 2010 onwards, 150 000-tonne machines may be uncompetitive in the global arena - many already are,’ Mr Briggs contended. ‘I’m convinced there will be more machines in the USA and the EU that will close.’
He went on to forecast that recyclers would shortly become reliant on an export market in which the global price and quality requirements would be dictated by China. Meanwhile, the emergence of a recovered paper ‘mountain’ would ‘force EU policymakers to review energy recovery’.