smart, simple, safe trading Advertorial
Do you ever won- der what happens to your paper packaging after you have sold it? Do you ever won- der why prices for raw materials keep rising?
Angus Macpherson, Managing Director of The Environment Exchange (t2e).
The answers to both these ques- tions are linked. Most packaging
gets recovered from the waste stream to be recycled. In the UK rates of over 70% are be- ing achieved thanks to Producer Responsibility legislation, the creator of the PRN, and Land- fi ll Tax. As the market for recovered paper is buoyant currently the secondary raw material price can cover the cost of recovery from the waste stream, aggregation, and delivery for re- processing into a new product so Paper PRNs are at administrative values but they are there
in reserve should circumstances change.
And what are the factors driving this buoyan- cy? The recovered paper market and in partic- ular packaging (Old Corrugated Cardboard) has become a global market with China rap- idly expanding over the last 15 years to be- come the engine of demand and the price de- terminant. They now import some 27 million tonnes of recovered paper per year from 61 different countries. 15% of all containers that are shipped from the US to China are full of recovered paper. The UK now exports more that 50% of the recovered paper it collects, some 4.5 million tonnes, to over 20 countries, which accounts for 2.5% of our annual global container traffi c.
But China are not the only new buyers the Gulf Region, Laos, Vietnam, Korea (North and South), Thailand, India, Mexico and even Bra- zil are importing recovered paper. The closed loop system is being distended globally. The debate is no longer should paper be recycled
but where should it be recycled – near the source of the supply or near the end market for the product? And is there enough to go round?
So a market that has historically been supply heavy is becoming supply scarce which not only increases price but also increases the cost of material discovery. Add to this the risks of exchange and freight rate volatility combined with a fl uctuating and increasing price for en- ergy and an increasing demand for wood fi bre products, it is hardly surprising that raw ma- terial, primary and secondary, is increasing in both price and volatility.
A similar situation faced the copper and tin industries in the mid-19th century and they developed the London Metal Exchange to provide certainty to traders in an otherwise uncertain world. Is it not time as supply chain pyramids become ever more interwoven that the packaging industry thought of new tools to manage their supply chains?
OCC/ONP
Test Our Market
www.t2e.co.uk
t2e will provide you with a smart, simple, safe method of buying and selling recovered paper
t2e - smart, simple, safe trading The Marketplace for Recovered Paper
www.t2e.co.uk The Environment Exchange Limited, Hudson House, 8 Albany Street, Edinburgh EH1 3QB Tel: +44 131 473 2337
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