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Paper
For some time, we had known that 2020 was going to be a watershed year for the recovered paper industry across the globe. China had served notice several years earlier that, on the final day of last year, it would halt imports of all materials falling into the category of “solid waste”.
In its heyday as an importer of recovered fibre, China had bought in upwards of 30 million tonnes per year from a host of countries dotted throughout the world. In 2020, recovered paper import quotas approved by the Chinese authorities had dwindled to just 6.7 million tonnes. Although supplier nations had received several years’ warning of the import changes to be made by China, last year was to provide the exclamation mark to this market-altering shift in policy.
As 2020 finally dawned, however, few if any of us could have imagined that we were about to take our seats on one of the wildest roller-coaster rides in the industry’s history. Mainly as a result of the combination of China’s approaching import ban and the COVID-19 pandemic, the markets entered a state of almost constant churn: demand and prices headed sharply higher and then steeply lower throughout most of the year. The level of unpredictability was so exaggerated in 2020 that even the most experienced of industry professionals have been left struggling to predict what 2021 might hold.
Last year began with a continuation of the recovered paper market trends seen in late 2019: difficulties in finding adequate markets for all the material available to sell, resulting in heavy pressure on prices. But then COVID muscled its way into the spotlight: as severe lockdowns were imposed around the world, offices and industries shut their doors and economies stalled. Collection rates went into decline for a number of grades, notably deinking for which recovery rates remained low until the second half of 2020. For the lower grades, conversely, the year brought a surge in supply as pandemic-related restrictions forced the closure of many non-essential retail outlets and prompted a sharp swing to shopping online – the so-called “Amazon Effect”.
On the demand side, it was a case of either feast or famine. From relatively low demand in the first quarter of 2020, mill orders for recovered paper surged to record highs in the tumultuous early weeks of the pandemic’s global spread; by the end of the second quarter, however, demand plumbed the depths once again as our mill customers had built up substantial stocks. The year ended with one more twist as demand once again gathered a strong momentum, reducing mills’ stocks to almost zero as 2020 drew to a close.
As mentioned above, Europe, North America and several other parts of the world had been able to rely for many years on China as an outlet for much of their recovered paper surpluses. With the knowledge that this option was to be removed, exporting nations have spent the last two or three years seeking alternative outlets for this excess material which, in the case of Europe, amounts to more than 8 million tonnes a year.
During the BIR Paper Division webinar in October 2020, a panel of experts considered not only the great strides already made towards offsetting the loss of recovered paper orders from China, but also the need for further developments to account for the remaining surplus. Indeed, it is encouraging that, in Europe’s mill sector alone, an additional 2 million tonnes of new capacity is scheduled to come on stream in 2021.
Also welcome is the widespread research activity aimed at developing new markets for paper. In this context, Gilles Lénon and Fabienne Vercelli from the Centre Technique du Papier in France gave details at our October 2020 webinar of two emerging barrier technologies – chromatogeny and MFC wet lamination – which have the potential to extend paper and board usage within the gigantic and ever-growing packaging sector.
In 2021, demand for recovered fibre appears certain to remain high as new applications and capacities continue to be developed. It is equally certain, however, that 2021 will see us all taking another turn on the roller-coaster.
“The level of unpredictability was so exaggerated in 2020 that even the most experienced of industry professionals have been left struggling to predict what 2021 might hold.”
Jean-Luc Petithuguenin
PRESIDENT PAPER DIVISION
IMPORTANT FACTS
Made from vegetable fibres called cellulose, paper as we know it today was first created in China more than 2000 years ago. Since the advent of the printing press in the 15th century, its use has spread across all continents to the extent that, currently, it is hard to imagine the world without this versatile material. Around 420 million tonnes of paper and cardboard are produced worldwide every year, with well over half of the raw material coming from recovered sources.
Some 50-60% of recovered paper comes from industry and business. This includes paper trimmings, cuttings and shavings from manufacturers and converters, as well as goods discarded before they reach the consumer, such as unsold newspapers and magazines. The remaining recovered fibre comes from households.
THE NEED FOR FREE TRADE
Recovered fibre collections in, notably, North America and Europe easily exceed local consumption needs and so overseas trade has become a major component of this market. But despite the environmental, social and economic advantages of the worldwide trade in recovered paper, flows have been disrupted over recent years. China established itself as the leading importer of recovered fibre, buying around 30 million tonnes per annum from overseas suppliers at one stage. However, the Chinese government has recently imposed more stringent import rules, with the result that overseas purchases are believed to have declined below 10 million tonnes in 2019 and are expected to drop still further.
Similarly restrictive import measures have also been introduced by other countries in Asia which had been leading buyers of surplus material from Europe, thus impacting the global market and creating widespread concern over the diminishing outlets for the world’s excess volumes because of a move away from the free trade principles supported by BIR.
RECYCLING PROCESSES
According to industry estimates, paper can be recycled anywhere from 3 to 8 times. Each time recycling occurs, the fibres become shorter and weaker, and virgin pulp must be introduced into paper production to maintain the strength and quality of the fibre. Through this process, recovered paper and forest-based products complement each other ecologically and economically.
The recycling of paper follows a series of steps which may vary depending on the type of paper and its degree of deterioration.
Sorting: Paper products must be separated according to their composition and degree of deterioration. Different types of paper can sometimes be mixed. Others, such as paperboard, are recycled using a single-grade process, meaning that no other type of paper can be mixed in during its processing.
Baling: Large quantities of paper are packed using hydraulic machines which apply enormous pressure to compact recovered paper into blocks that are easier and more cost-effective to transport.
Shredding: Recovered fibre is shredded into smaller pieces and mixed with water to make pulp.
Washing: The pulp is washed, refined and cleaned, then turned into a slush that undergoes filtering through screens and other separation processes to remove contaminants such as ink, clay, dirt, plastic and metals. Dyes, coatings and other additives can be introduced during this process. Water is continuously drained and cleaned for reuse.
Bleaching: In order to whiten paper, the pulp can be bleached using hydrogen peroxide and chlorine.
Pressing: The resulting paper sheet, known as “web”, is pressed between massive rollers to extract as much of the remaining water as possible and to ensure uniform smoothness and thickness. The semi-dry web is then run through heated dryer rollers to remove any remaining water.
Rolling: The finished paper is processed into large rolls ready to be manufactured again into new consumer products.
