BIR Report

Import Controls not Exclusive to China

During the Paper Division meeting of Brussels-based Bureau of International Recycling (BIR) at the association’s Autumn Round-Table Sessions, Reinhold Schmidt of Germany’s Recycling Karla noted there were a host of factors driving paper recycling markets as of late.

In his first meeting as president of BIR’s Paper Division, Schmidt said overcapacity among graphic paper producers, China’s Operation Green Fence import quality controls, the slowdown in China’s economic growth and the eurozone crisis have all posed challenges for paper recyclers. He added over-regulation of the recycling markets and damaging examples of protectionism to this list.

Also discussing trends in the paper recycling industry was Ranjit Baxi, former Paper Division president and founder of J & H Sales International, a paper recycling firm headquartered in the U.K. In his remarks, Baxi highlighted the presence of protectionism, pointing in particular to the negative effect of delays for exporters through “excessive” documentation demands and random spot-inspections at the point of export in Europe.

Baxi also underlined that China was not alone in imposing import quality controls; for example, major recovered fiber buyer India had issued as far back as 2010 a list of specifications, with many being stricter than those currently enforced by China through its Operation Green Fence.

Following up on the trend with regulation, Merja Helander of the Finnish paper company Lassila & Tikanoja pointed out that progress had been achieved through the European Commission and Council of Ministers by the regulation setting end-of-waste criteria for recovered paper. In her role as president of the European Recovered Paper Association (ERPA), she urged all interested parties to push for agreement with the council proposal for end-of-waste by the European Parliament—something which, she said, would bring smart regulation to the EU (European Union) paper recycling industry.

During the paper session, Helander, joined by Paper Division Past President Dominique Maguin of France, Lars-Gunnar Almryd of IL Recycling in Sweden and general delegate Thomas Braun of Germany’s BVSE, reviewed the latest recovered paper market conditions across Europe. All noted that declining collection volumes continued throughout Europe.

As for exports to China, Baxi observed that U.S. recovered fiber shipments to China increased roughly 30 percent from the first half of 2009 to the same period in 2013, while exports from Europe to China dropped by around 12 percent during that same time.

Bill Moore with Moore Associates, Atlanta, noted that U.S. and Canadian demand for old newpapers (ONP) and old magazines (OMG) would slide from 4.82 million metric tons in 2010 to 3.49 million metric tons in 2016. He termed ONP “a disappearing grade” in the United States. North American consumption of old corrugated containers (OCC) and kraft would be far more stable, rising from 19.01 million metric tons to 19.43 million metric tons over the same period, he added.

Ilpo Ervasti, senior adviser at the independent consulting firm Indufor Oy, based in Finland, spoke of the chaos affecting recycling-related terminology in the paper and board industry. The 365 trade grades identified globally were “partly overlapping” and “not well-defined,” underlining the need for “one uniform, global system for paper-related terms and variables” to “enable comparisons between regions,” he said.

The BIR Autumn Round-Table Sessions was in Warsaw, Poland, Oct. 27-29, 2013.

A Bubble for Stainless Steel?

The recent phenomenon of nickel pig iron (NPI) production in China has resulted in a drop in scrap consumption in the country. At the same time, the growth in China’s internal and external scrap volumes could create a stainless steel “bubble” over the next several years, according to Heinz Pariser, a guest speaker at the Bureau of International Recycling’s (BIR’s) Stainless Steel & Special Alloys Committee, held at the BIR’s Autumn Round-Table Sessions in Warsaw, Poland, Oct. 29, 2013.

According to Pariser, over the past 10 years the use of NPI has grown from a negligible amount to roughly 57 percent of the Chinese stainless steel industry’s external raw material purchases now. Meanwhile, the use of stainless scrap has dropped from 52 percent to 11 percent over the same period, said Pariser, who is the head of Heinz H. Pariser Alloy Metals & Steel Market Research, Germany.

Assuming low recycling ratios, Pariser said China’s stainless scrap reserve was expected to increase from less than 20 million metric tons in 2012 to 62.2 million metric tons 2020 and to 164 million metric tons by 2030, which would be a significant challenge for the stainless scrap industry.

Pariser predicted that global stainless melting production would climb 5.9 percent to nearly 37.9 million metric tons in 2013 and a further 6.5 percent next year to 40.37 million metric tons.

However, output in China was expected to jump 13.8 percent in 2013 and 10.1 percent in 2014 to 20.5 million metric tons, more than half of the world total. For the same two-year period, stainless steel production in the European Union was likely to decline by 5.2 percent this year and 2.3 percent in 2014, while production in the United States will show an increase of 3.5 percent this year and a much stronger 12.3 percent next year, Pariser noted.

He said China was “overdoing it” in terms of stainless steel capacity expansions. He pointed out that increases were running ahead of demand and leading to growing global oversupply.