The current UK increase in prices for certain grades of recovered fibre, especially OCC, would indicate that some areas of the recycling industry is facing real challenges in maintaining segregated recyclate collections.
Some six weeks ago, Simon Ellin, the Recycling Association’s Chief Executive, raised concerns over the lack of fibre to make corrugated boxes as many councils across the UK suspended their recycling facilities due to Covid-19. Since then, the box industry has seen a spike in demand making it a key product in the supply chain for food and pharmaceuticals.
In early April, DS Smith‘s Head of Recycling, Jochen Behr, said that while not seeing any disruption at their Kemsley mill, it was important that the supply chain works together to keep materials moving at this crucial time.
Industry commentators confirm that the increased demand for decreasing levels of source material, particularly OCC, is reflected in current price increases.
Office/printers waste paper is desperately short because of the closure of offices and print works which is affecting the production of office paper, envelopes, wrapping paper, drink carrier packs and other paper/board based items. Some tissue mills are even buying newspaper and magazines to supplement the low supply and high cost of office paper, but arisings of such are diminishing with less newspapers and magazines being bought because of shop/transport/travel closures and the general lock down.
Shortages are not yet affecting newsprint mills as the demand from them is reduced – but any slack is being fully utilised by producers of hospital disposable bed pans and animal/pet bedding manufacturers who have seen demand increase substantially.
UK domestic prices of most grades of recovered fibre have risen substantially in the last few weeks with OCC/KLS (which was £35 to £45 tonne at the end of March) now changing hands for prices up to £100 tonne. Charges for mixed waste paper are no longer in place with most mixed lower grade prices in positive double figures. Because of the demand at home and Europe, exports to the Far East and India are now virtually none existent.
These are not good times for the recycling industry with the lock down and uncertainty of what the future holds. But increased prices, albeit for reduced tonnages, is helping recyclers who were going through a difficult period with unsustainable low prices and shipping difficulties in the past year.
