Declining energy supplies in Europe have left once-profitable paper mills facing a whole new profit and loss account, according to the head of the paper division at the Brussels-based International Recycling Bureau (BIR). .
Francisco Donoso of Dolaf Servicios Verdes SL, based in Spain, at the paper sector meeting at the BIR autumn roundtable event in Dubai, United Arab Emirates (UAE) in mid-October. introduced the industrial sector of It cut production in response to Russia’s cutback in natural gas and oil exports to the European Union.
Prices for old cardboard boxes (OCC) have fallen 80% to 90% in recent months, Donoso said, due to very low demand worldwide and high inventories of the material at European paper mills.
“One of the reasons is the high cost of energy, especially gas, which is the biggest production cost for the factory,” says Donoso. “The demand for our products is also low, so we cannot pass this cost on to the selling price. [and] Nor can it reduce energy costs. So the only cost they can control is how much you pay for raw materials. ”
Regarding the situation in the United States, Donoso said prices for mixed paper have reached $0 in some areas. But prices have fallen fastest in Europe, where Donoso said he expects further downtime, suggesting it’s “hard to know where the bottom is” in European markets. rice field.
Nishant Sahney of United Arab Emirates-based Gaurav Vipa Papers Pvt. Ltd. said waste paper prices in the Middle East, which had been soaring for more than six months, had fallen dramatically.
“China doesn’t buy pulp, so we don’t export to China anymore,” says Sahney. “Additionally, demand in the West is declining, so we are now competing with manufacturers in the Middle East and other Asian countries. I can’t afford to pay the price a month in advance.”
Ranjit Bashi, president of the BIR-affiliated Global Recycling Foundation, said in a more upbeat tone that the paper sector has always proven resilient. “Our industry is a very strong industry and, through Covid, we will always be stronger,” he commented.
Baxi continues: Demand for paper hasn’t fallen – it’s still there. It’s time to support new countries elsewhere. [Middle East] Or the African countries that could become the next manufacturing hub. Don’t let price fluctuations upset you. Market demand is strong, so let’s be positive. ”
India’s situation may have receded recently, but Sahney’s presentation suggests that the Indian market will import 7 million tonnes of waste paper in 2021, 40% of which will come from the US, 25% from Europe and 22% from the Middle East. Described as imported. , Sri Lanka, Australia and Africa make up the rest.
Consumerism is on the rise in India, with 65% of Indians under the age of 35, which is a huge opportunity for the paper industry, Sahney said. Another plus for him is his Swachh Bharat Abhiyan program in India, designed to increase waste paper collection.
But Cerny added that China has invested heavily in Vietnam and Malaysia in recent years to cater to its domestic market, reducing demand for Indian goods and creating a supply-demand gap. Did China invest because it could or should? I can see why waste paper prices are plummeting across the board.”
Saudi Arabia-based paper and board producer Atul Kaul of Wallaq said in 1996 the kingdom required 85% virgin fiber for production, but now uses 85% recycled paper. He said that it is like this.
Similarly, in 1995, 80% of regenerated fiber produced in Saudi Arabia was exported, the rest was landfilled. This year, 90% of his waste paper produced will be consumed by local mills, Kaul said.
The BIR Autumn Roundtable was held at the InterContinental Festival City in Dubai.
