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Paper and Plastic

Additional Commodities

Brian Taylor January 15, 2013

Just as metals traders experienced ups and downs in 2012, recyclers and traders who deal in scrap paper and plastic can look back on some difficult stretches.

Scrap paper markets took a plunge in pricing in the summer and early fall months in particular, with recyclers citing the disappearance of export orders as the leading culprit.

 A combination of customs-related clog-ups at Chinese ports as well as production curtailments in both China and North America caused what many perceived to be a demand-side price drop.

Supply throughout 2012 was seldom described by recyclers in North America as anything better than “steady,” and often referred to as “disappointing.”

For several years, the Chinese export market has been the sponge to absorb recovered fiber, especially the old corrugated containers (OCC) grade most commonly handled by C&D recyclers.

A September 2012 presentation by Cao Zhenlei, the secretary general of the China Technical Association of the Paper Industry (CTAPI), points to the potential of limits being reached in China’s ability to keep absorbing scrap paper.
In reviewing China’s 12th Five-year Plan, Cao notes that while recycling remains part of the “guiding ideology,” so does a paper industry “changing from big to strong.”

In his presentation, Cao said China’s newsprint industry has “entered a steady declining period” and that printing and writing production capacity also is “in a difficult period.”

Contrarily, Cao said packaging paper and board “still has development opportunities” and that finding new uses for paperboard within China “has remarkable potential.”

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