We are entering a world where recycling markets are shifting, the previously well-trodden path has disappeared, and new markets are emerging. This transition period can feel like a lifetime for those businesses affected by this tumultuous period, so how do we ride the wave rather than fall overboard?
Bans and taxes
During Q3 last year, China significantly reduced tonnages of paper accepted from imports to 20,000 tonnes compared to the 2.8 million tonnes accepted in Q1. This, combined with the Refuse Derived Fuel (RDF) Tax coming in Sweden and the Netherlands, has reduced the number of processing options for UK recyclable / recoverable material.
The Government plans to extend the ban to countries outside the Organisation for Economic Co-operation and Development. This will lead to increased costs to councils as it will restrict where they can send recyclable material.
What are the markets looking for? The answer is:
- clean material – No dirt, no organics, no woods or metal
- homogeneous bales - The same material throughout, along with consistent bale sizes and shapes
- greater scrutiny and traceability of supply - Photographs and named staff
Unforeseen factors, such as the coronavirus has affected shipping routes and container availability, as well as staff availability to install new scrubbers to comply with shipping emissions limits. The pandemic has meant that staff in China are currently not allowed to work in offices, meaning paperwork is not being organised. Whilst it appears this is coming to a close in China, there are country wide shutdowns in Europe. Therefore, unless businesses have contingency plans, there will be delays.
The mills are still there, albeit in different locations and demand is still there, albeit at a lower price. Pushing back on quality should be a lesson for us all. You can’t make a silk purse out of a sow’s ear.
Valpak can help
We provide a reliable and ﬂexible, ISO and SSIP accredited UK-wide waste management and recycling service to retailers, wholesalers, distribution centres, manufacturers and local authorities. In addition, we can help you obtain the best value for your recyclate and guaranteed service in these uncertain times.
Join our webinar
If you are looking to gain a more thorough understanding of current domestic recycling markets and associated financials, we hold "Quarterly Recycling Market Update" webinars (The next one will take place on 11 June at 14:00). Our presentation will provide delegates with an overview of the main material markets, including: cardboard, plastics and metals. We will also discuss the main drivers behind each market to provide a better understanding of what factors determine material pricing and where prices may go in the near future.
All Valpak events can be viewed on our website here.