3 changes in the global waste paper industry to watch in 2023
China is transitioning from recycled fibers to virgin fibers. This trend is mainly due to the sharp decline in China's waste paper imports since the import of waste paper was banned in 2021. This shortage of waste paper has forced some Chinese papermakers to look for alternative fibers, virgin fibers, including wood pulp and non-wood pulp. This may be a medium- to long-term trend. Since virgin fibers are generally of higher quality, Chinese papermakers can improve the quality of their finished paper and cardboard products by adding more virgin fibers to the fiber ingredient mix.
In the past few months, the price of used corrugated boxes (OCC) has fallen sharply around the world. The underlying reason is the slowdown in demand in China, with recycled pulp imports falling by 7.8% year over year in the first eight months of this year. The sluggish demand in China has slowed fiber demand in non-China Asian regions including South East Asia and India, where imports fell by about 9.0% over the same period. Domestic used corrugated box (OCC) prices in China and imported used corrugated box (OCC) prices in Asia both plummeted. Most, if not all, waste paper exporters, such as North America, Europe, Australia and Japan, have suffered from weak markets in Asia, and used corrugated box (OCC) prices have also fallen. Cooling domestic demand in North America and Europe also sent prices plummeting.
What is seen in the market now is the opposite of what will be seen in 2020 and 2021. The growth of e-commerce has slowed after the epidemic outbreak, as people have gradually reverted to going to the store for shopping and are more willing to spend more on services rather than goods. In terms of waste paper supply, this means a shift from used corrugated boxes (OCC) and mixed paper from residential to commercial sectors. Waste paper from residential homes tends to have a higher risk of pollution and inconsistency compared to commercial recycling, so this post-epidemic trend will greatly improve recycling efficiency and benefit the overall waste paper supply.
