Why are paper recycling prices at near-record levels? The answer boils down to uncertainties in the Chinese market and strong demand at home.
The prevalent paper-price factor pointed to by many observers is the effort by Chinese custom officials to halt the inflow of recovered materials that contain high levels of non-recyclables is working.
For example, Steve Wong, chairman of Fukutomi Co., a major scrap plastics trader, reports that 85,000 tons of imported plastics and metals have been seized in Shantou, China from 16 warehouses, and five groups of importers have been arrested. Paper industry observers say that as a result of the so-called Chinese National Sword import restrictions, Chinese paper recycling mills have increased their domestic bale purchases, and this has pushed local prices sky high.
At the same time, according to these experts, North American exporters with a good record of shipping clean bales under secure Chinese export licenses have been able to attain pricing that is only a few dollars under the previous record. This is because North American demand for recovered paper is also strong, and domestic mills have been forced to boost prices in order to attain sufficient volumes to keep their machines operating.
The result of these forces is the current market, which can be described as a bale-supplier’s dream.