Demand for recovered paper and board falls

The CPI said that the UK relies on global export markets to take more than 50% of the recovered paper it collects, with Far East markets taking more than 75% of the export total, and the current economic situation has left the UK in an incredibly difficult and strained position.

Exports account for, on average, more than 400,000 tonnes of recovered paper from the UK per month and without these markets UK merchants are left with little option other than to store the material they have paid significant amounts for or sell at loss making prices.

The situation in the UK has also exacerbated price falls in Europe, as there is a glut of UK recovered paper on the European market as well as excess European domestic stocks from the lack of Far East buying.

Peter Seggie, CPI recovered paper sector manager, said: “Increased Far East demand for recovered paper is likely to return in the medium to long term but this is unlikely to be at the growth levels seen over the past five years.

“The UK must learn from the lessons of these volatile times and, like the banking crisis before it, look at lowering future risks by examining what can be done domestically to make the UK more self sufficient.”

He added: “Wrap must look in detail at this market collapse to see what lessons can be learned for the future with regards UK waste and recycling policy, with particular focus on the impact of UK government’s apparent gold plating of household, municipal, industrial, commercial and packaging recycling targets.

“Before introducing higher and higher recycling targets, UK governments must ask themselves if there are solid, sustainable markets to accommodate reaching them, otherwise they are only kidding themselves.”

CPI represents papermakers, tissue manufacturers, corrugated packaging producers and recovered paper merchants.

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