Ban on Waste Paper is a Temporary 'Sigh of Relief' to Indian Manufactures

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Down in Prices of Imported Waste Papers, a Temporary 'Sigh of Relief' to Indian Paper Manufactures

Ban on Waste Paper is a Temporary 'Sigh of Relief' to Indian Manufactures

New Delhi: Huge mountains of oldnewspapers, cardboard and office scrap paperare piling up on Hong Kong's docks and itswaste-paper collection sites are at burstingpoint. A flotilla of cargo ships laden with papermeant for recycling has been stuck for weeks inlocal waters.The city's system for dealing withits paper waste has been failing since China inJuly imposed a ban on imports of 24 types ofrubbish, as part of a campaign against "foreigngarbage" and environmental pollution, includingunsorted scrap paper.China's policy of banning the scrap material toits territory could be reason of a smile on theface of Indian Paper Mills owners as they areexpected to get raw material in a very cheaperprice from America and Gulf countries.

Thedrastic price drop between 60 to 100 Dollars pertonnes on OCC and mixed paper grade could beprofitable for owners.“Yes, price of waste paper has been drasticallydropped. It's good news for paper industrycollectively. As of now, prices came down to 20to 30 % in September 2017. OCC grade has comedown to around 200 Dollars per tonnes from 260dollars, while mixed paper has reduced to 100 to120 dollars per tonnes from 175 dollars. We havealready place the order to overseas suppliers.

The benefit in reduction of finished products'price will be transferred after two months asshipment of waste paper takes two months totouch Indian Ocean. We are in doubt in gettingthe constant benefit of price reduction asChines importers are in talks to renewal of itslicences from next year. It could be the temporallyreduction in terms of policy alteration byChines Government” Mr. Akshay Jain, MD,Silverton Papers.As per the Industry experts “Potentially thebiggest impact could be on the waste paperfront with restrictions on paper sent to China forrecycling. China is a hugely important marketfor UK paper recyclers with 3.6 million tonnesexported last year. Of this 2.4 million tonneswas used cardboard while near 1.1 milliontonnes of mixed papers were exported.

Thismixed paper usually contains some newspapersand other papers from households such ascereal boxes, pizza boxes, leaflets and loosepapers.”There have been concerns about thecontamination which has been found in someloads of mixed paper exports and the paperindustry has been trying to get the messageover that quality is important, with theRecycling Association, for example, running itsQuality First campaign.Under the current National Standard of thePeople's Republic of China GB16487, implementedin 2006, a 1.5% non-paper materialitems, were allowed at 1.5% of the weight of theimported waste paper.“We have to analyse the situation emergingout from the imposition of ban on waste paper  by China.

Surely the benefit of reductionwill be passed on to paper mills. Our billfor mixed waste paper could be reducedto 40 to 45 dollars per tonnes. We don'tsee any fluctuation in domestic Indianmarket as concern to price reduction ofwaste paper, we are now crossedfinger.” Tanmay Sangal, Director,Sangal Papers Ltd.“We can't anticipate any changes inchina's Import Policy but we are nowenjoying the 80 to 90 dollars per tonnesprice reduction on OCC grade. Thisbenefit will reflect in our balance sheetonly after November as soon as shipmentof raw material reaches to us.Meanwhile the prices of the finishedproducts (Kraft Paper) already droppedby 3 to 4 Rs per kg.

Due to theovercapacities of paper mills, Markethas been flooded resulting in to the dropof price.” O D Rathi, MD, Kaygaon PaperMills Ltd.The ESA in the U.K. said around 1.1million tonnes a year of mixed paper -newspaper, magazines and cardboard -is exported to China out of the 8 milliontonnes of waste paper collected inBritain. Exporters have now beenseeking new markets such as Europeand Southeast Asia given the uncertainty,according to the ESA'sRindegren."In terms of cracking downon polluting activities we support Chinabut the way it has done it appears quiteheavy handed.

Some companies areexport arms of Chinese paper mills andthey will be hit as well," he said.In Japan, a waste paper wholesalerunion in the Kanto region encompassingTokyo, confirmed to Reuters that theyhad skipped September's exportcontract of waste paper to China, thefirst time that had happened in severalyears.

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