Commodity Report - In Demand

Generators and processors of scrap paper in Western Europe are currently enjoying healthy demand from consumers both near and far.

At the opening session of the 2007 European Paper Recycling Conference, paper industry consultant Bill Moore, Moore & Associates, Atlanta, noted that new papermaking capacity was coming online in Europe at the same time that demand was accelerating from Asia.

The region was responding to the demand for recovered fiber with vigor, as collection activity and recovery rates had been increasing in several Western European nations.

While Europe’s demand for fiber had helped, Moore noted that "the story still is China. China is driving the market and will for some time to come."

Western Europe is seeing its recovery rate for scrap paper zoom from around 40 percent in 1990 to a projected 70 percent by 2012.

While some speculation has centered on China being able to generate more scrap domestically, Moore was not convinced. He remarked that while China’s "apparent recovery" rate was only about 34 percent based on domestic paper production, the actual figure rested at some 60 percent nationally and as much as 80 percent in some cities. So many boxes are exported that calculating based on domestic numbers was not practical.

China’s boost to the market remained in place, but Moore noted that "a stumbling point" of overcapacity on the containerboard side is likely at some point.

Frits Beurskens of Smurfit Kappa, who is also chairman of the European papermaking organization CEPI, noted that Europe’s paper recycling rate continued to move upward at "roughly 1 percent per year."

The paper mill company executive also urged recyclers to keep their eyes on quality, as paper machines that "run faster and faster" were more reliant than ever on feedstock with minimal contamination.

Beurskens expressed alarm for European Union support for biomass energy that may soon have such alternative energy facilities competing for portions of the fiber stream to be used as fuel. "This will be the most important issue in our industry for the next few years," Beurskens predicted.

Also at the opening session, Niels Sogaard of DanFiber AS in Denmark gave an overview of the cooperative fiber collection program for municipalities in that nation.

The source-separated collection program allows DanFiber to supply clean streams of fiber grades that are in demand by paper mills, according to Sogaard. Regarding commingled collection, Sogaard said, "Maybe it will come—I hope not."

The 2007 European Paper Recycling Conference, organized by the Recycling Today Media Group, was held at the Hilton Amsterdam Oct. 3 to 5.

(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)