Waste paper price is expected to surge to USD 450 level for Indian Destination in 2022

Waste paper price is expected to surge to USD 450 level for Indian Destination in 2022

- the prices of finished kraft paper are so high in European and other markets that Low cost recycled paper from India is in huge demand across middle east, far-east, neighbouring countries of India, and even in Europe.

- by January end or early February 2022, wastepaper prices will see fresh all-time highs and surge.

- About 200 new mills (India) are in commission which will be adding up further volume for imports.

Stallion Overseas is a prominent indentor company in the field of recycled paper such as brown grade, white grade, and stock lots, was incorporated by Mr. Bhavesh Rajput in 2010, located in Surat, Gujarat, India that is nearby to Hazira port. The below article on waste paper scenario has been written by Mr. Bhavesh Rajput, views are personnel based on the present market conditions.

Surat | 17th November 2021 | The Pulp and Paper Times:

Wastepaper is the prime raw material for Indian Paper Mills. Paper can be recycled for at least 5 to 6 times before it loses its strength and becomes non-recyclable. Above 600 mills across India uses imported wastepaper for their regular production. About 200 new Mills are in commission which will be adding up further volume for imports.

On an average today Indian Mills import about 1.7-2 Million tons every month.

To analyse the market, we must understand few basic factors:

1. The low availability of local wastepaper in India at times of demand and production.

2. India does not have any set of environmental guidelines and strict methods for waste classification, sorting and recycling.

3. The annual consumption of paper in India in comparison to other countries are drastically very less. This results in lesser generation of wastepaper in Country.

4. India is a new production and packaging hub for many global companies. Which is significantly increasing the demand of finish paper. 

Based on import data pattern from 2016 to 2021 and few other factors, it can be ascertained that import of wastepaper will touch about 2.5 million to 3 million a month within next 1 year for Indian Market.

Covid 19 has forced to change lot of theories and practices. What earlier looked seasonal is now an affair of entire year. Earlier it was a regular habit of paper industry to slow down during winter and see new bottoms, but looking at the present scenario, it can be said, the market has already been sluggish for entire year of 2021 and now it is time to grow.

If we look at the Pre Covid and Post Covid changes in the Industry, OCC Prices from USA for Indian Ports were trading at USD 85 to USD 95 during 2019 November. As soon the crisis started building up due to continents lockdown, this price went as high as USD 350 and today it is close to $320 levels. Indian Mills are at view that this is the maximum height of Wastepaper prices, and it cannot rise above it, but if we look into further details, then before China announced to ban of Wastepaper in their country back in the year 2016, OCC of USA origin was already trading at USD 290 to USD 320 levels. So if the prices during all good seasons were above $290 then today's price is nowhere costly if we consider inflation and other factors which adds up the price of commodity gradually over a period of time.

If we accept above factor, then we must understand first what dragged the market to $85 levels and now what is taking it to above $300 levels. China was the biggest importer of wastepaper in globe. Till 2016, China was importing about 4 to 4.5 million tons on an avg. every month for wastepaper. After the Govt. issued capping in imports, slowly and gradually China started acquiring mills in Far East to produce finished paper or pulp and began importing it as a RAW MATERIAL in their country.

Even their demand further grew as China was the Production and Packaging hub for the Global Companies. This demand forced them to seek Indian Mills material. Indian Mills started exporting Pulp to China from 2017 and started demanding more of wastepaper from global suppliers. Today China is importing about 6 million tons of Pulp / Finish paper to mitigate their demand if we check the Chinese Import Data on Paper. Demand for Recycled Finish paper in packaging industry has grown so high that even if the market slows down, the prices won’t see much of correction and bottom.

Seeing this surge again, the prices of wastepaper started building up after 2020 first qtr.

Today the scenario is such that India is turning out to be a new global player for Packaging and Kraft Grades. Today the prices of finished kraft paper are so high in European and other markets that Low cost recycled paper from India is in huge demand across middle east, far-east, neighbouring countries of India and even in Europe.

Considering above factors, I am assuming that by January end or early February 2022, wastepaper prices will see a fresh all-time highs and surge. By the end of 2022, I expect the prices to trade around USD 450 Levels for OCC grades for Indian Destinations.

Above are my personal opinions and views and readers must take their own decisions on buying or selling of wastepaper through their own best findings. I do not take any responsibility on their choices.

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