A shortage of drivers, the impact of Brexit and Chinese quotas are all causing some concerns within the waste (recovered) paper sector.
Driver shortages are impacting across the sector and are also affecting the waste management industry. Some companies have told letsrecycle.com that they are stepping their own efforts to train and retain drivers while others expect to see driver costs go up by at least 4%, or possibly 7%, in the New Year.
One waste paper business said that drivers were “now willing to hop between companies as they can demand higher rates” while another said that the “shortage is chronic and getting worse. The fear of Brexit isn’t helping.”
A bright spot in the markets however, is that orders from China are starting again, albeit at a low level. Quotas have been allocated for some material for processing in China in the first quarter of 2019. However, some exporters to China have said that despite the quotas being released and orders taken, most only need smaller amounts of OCC (used cardboard) at present and that next year’s overall demand could be at least 20% down on 2018.
A shortage of drivers is adding to market pressures in the waste paper sector (picture: Shutterstock)
Light
One exporter said: “While there is light at the end of the tunnel with quotas being issued, there are restrictions on shipping availability, a shortage of drivers in the UK and the continuing need to ensure material is of the best quality. So it remains a challenging market.”
Furthermore, some UK businesses have told letsrecycle.com that expected orders for China have not been placed in the UK market and there are proposals for mill downtime in the New Year in China and South East Asia which will cut demand.
There are already signs in the UK that some depots are full with UK mills well supplied. Consequently, there is anxiety over whether high levels of arisings in the next few weeks will cause particular problems as stocks build up in the face of overall slow demand for OCC, used cardboard, and mixed papers. In contrast, office grades remain in steady demand in what is generally a consistent industry although prices have weakened slightly as pulp prices reduce.
The annual surge in supplies from the retail and commercial sector of used cardboard in December and into January, will come as exporters and domestic mills are well supplied. Add in extra volumes of mixed from the domestic stream, some of which is likely to be of poorer quality because of Christmas-related contamination, and sector experts feel that it could be as hard as last January to move tonnage.
Busy ports
Exports to China are moving but demand is said to be slow
Finding alternative markets in South East Asia will be more difficult this time than it was in the first part of 2017 because ports in northern Vietnam, for example, are busy with queuing of ships while the quality of material from the UK is also under scrutiny by Vietnamese and Malaysian authorities.
One paper sector expert said these countries have been paying attention to Chinese demands but they are additionally concerned about moisture levels in bales of cardboard.
“Moisture levels of some material can be as high as 16% before they leave the UK and by the time it reaches south east Asia, this can be 20%. Loads like this could be rejected,” one exporter warned.
They added that the problem is not too bad if the water is on the outer part of the bale, but if it is wet inside, it could be rejected. “It’s not easy,” they added. “The problem is that even if it has been stored under cover, it could have been collected outside in open containers.”
The post Driver shortage adds to paper market pressures appeared first on letsrecycle.com.
Source: letsrecycle.com Waste Managment
