PRC India 2017: Strength in numbers

PRC India 2017: Strength in numbers
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Bill Moore of United States-based paper recycling consulting firm Moore & Associates has been tracking recovered fibre pricing for a long time, but he says even he was surprised at the turn of events in late 2016 and early 2017.

Moore, speaking to delegates at the 2017 Paper Recycling Conference India, held in Mumbai in February, said prices for old corrugated containers (OCC) and other scrap paper grades in the closing two months of 2016 and January 2017 rose “as high and fast, almost, as I’ve ever seen.”

Reviewing the OCC price over the past two decades, Moore said, “When you match it to global GDP you get a reasonable correlation.”

The mixed paper grade has been rising along with OCC and even narrowing the spread in its value against OCC, said Moore. He said mixed paper, which often is used as a substitute for OCC when the market heats up, was trading at about 76% to 79% of OCC’s value in early February 2017, higher than the more common 65% figure.

Moore said globally the old newspapers (ONP) grade remains “a supply-short grade,” as most nations are producing less newsprint each year. While the decline of newsprint has been underway for a decade, Moore said regarding the global production of other printing and writing (P&W) papers, “the bottom is just falling out.”

The result for recyclers and mill buyers is a dramatic decline in the sorted office paper (SOP) grade. “There is a big shortfall [of SOP] and it’s going to get worse,” said Moore. He said the price of SOP when it is at the bottom of its pricing cycle “is going to stay higher.”

India is positioned as “the fastest growing market for paper [consumption] globally,” said Vikas Mahajan of Pathankot, India-based Mahajan Recycle Resources. The production of paper in India also is increasing, although a weak link is the mill sector’s reliance on recovered fibre in a nation where, by Mahajan’s estimate, as little as 25% to 27% of scrap paper is recovered for recycling.

Mahajan pointed to China as a nation that has quickly expanded its collection of scrap paper, rising from 10 million tonnes collected in 2005 to 50 million tonnes in 2015.

Whether mills use imported or domestic recovered fibre, Mahajan said they are effectively paying more for material because of the logistics costs involved and, for domestic fibre, the payment of value-added or goods and services taxes.

For mill buyers in India and beyond, 2017 may well go on the books as a year of high feedstock prices, said Moore. “All recovered paper grades, with the exception mixed paper, are for the most part supply-short in the developed regions of the world,” he stated. “In general, [2017] trend line pricing for all grades is up going forward, although the market is starting to get to a top,” he stated.

The 2017 Paper Recycling Conference India was 6 and 7 February at The Leela Hotel in Mumbai.

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Source: Recycling Today
PRC India 2017: Strength in numbers
<![CDATA[Bill Moore of United States-based paper recycling consulting firm Moore & Associates has been tracking recovered fibre pricing for a long time, but he says even he was surprised at the turn of events in late 2016 and early 2017.   Moore, speaking to delegates at the 2017 Paper Recycling Conference India, held in Mumbai in February, said prices for old corrugated containers (OCC) and other scrap paper grades in the closing two months of 2016 and January 2017 rose “as high and fast, almost, as I’ve ever seen.”   Reviewing the OCC price over the past two decades, Moore said, “When you match it to global GDP you get a reasonable correlation.”   The mixed paper grade has been rising along with OCC and even narrowing the spread in its value against OCC, said Moore. He said mixed paper, which often is used as a substitute for OCC when the market heats up, was trading at about 76% to 79% of OCC’s value in early February 2017, higher than the more common 65% figure.   Moore said globally the old newspapers (ONP) grade remains “a supply-short grade,” as most nations are producing less newsprint each year. While the decline…