LONDON: China’s ban on the import of recyclable material has pitched exporters in the United Kingdom into a desperate scramble to find new markets for an estimated 80,000 TEU a year in what UK Recycling Association CEO Simon Ellin has labeled a crisis.
Finding and developing supply lines to these new markets is urgent as they can accommodate far less volume than China and are fast filling up with major exporters from the world’s top three supplying countries — the United States, United Kingdom, and Japan — all trying to source alternative destinations for their recycled waste.
Data from Global Trade Atlas, a sister product of JOC.com, clearly shows the UK struggle to find alternative markets. Since China’s ban, UK waste commodity exports to the world declined 20.8 percent in 2017 to 3.8 million tons.
Ellin said there was a complete ban on post consumer plastics, about 400,000 tons per year of which was exported from the United Kingdom to China, and a complete ban on mixed paper exports to China that are as much as 1.1 million tons per year. “This has cut the numbers of containers our members export by 40 to 50 percent,” he said.
China is granting limited import licences for cardboard in 2018, and Ellin said because they needed the long fiber the US market supplied, China was prioritizing US tonnage. “It will be very difficult for our UK members. We are trying to find alternative markets but they are rapidly getting full.”
Those other markets are India, Vietnam, Indonesia, and Malaysia, but shipping analyst Drewry said between them they lacked anything like the sort of capacity required to do the same job as China. The country imports about 30 million tonnes (33 million tons) of wastepaper each year, along with 8 million tonnes of waste plastics, roughly the same as the rest of the world combined.
One of the United Kingdom’s top three recyclable material exporters is Cycle Link International Holdings, and its global logistics director Gary Waters told JOC.com the ban had made business very challenging, especially with the United States expected to win a greater percentage of the fewer import licenses being issued.
“China’s mills prefer US material because of the longer fibers. The number of import licenses has been reduced, but the percentage make-up of the quotas in place means there has to be more from the US and less from Europe, with the mills able to replace some of the European material with domestically sourced material,” he said.
However, Ellin said the domestic material was not suitable for packaging of international export products. “China’s desire to concentrate on its domestic markets and stimulate them is not providing enough quality fiber because domestic cardboard is not strong enough. Luxury goods need high quality cardboard. That’s the model,” he said.
“China is now running out of cardboard. Alibaba has no cardboard boxes and Chinese mills operating in Vietnam are shipping over cardboard because they don’t have enough.”
The curbs on waste imports were announced in the middle of last year, and the target implementation date was set for Jan. 1, 2018, with enforcement beginning March 1. But the announcement of the pending bans last year set up a chain reaction of shippers pulling back on their exports and Chinese recyclers slashing imports.
The suppliers of recycled material have to comply with China’s regulations, not the exporters, and meeting the high quality threshold comes at a cost, with new machinery and additional pickers needed to ensure the waste is at the required standard.
Waters explained how the export of recyclable material worked in the United Kingdom. Cycle Link buys from commercial sources or recycling facilities and from retailers and sends vehicles in to pick up material that has to be in bales to get the full weight inside containers. The carrier collects the cargo from a supplier’s premises and transports it all the way to mills in China where it is processed to make the finished paper used in cardboard boxes that are transported around the world with new products inside.
“But the market is not buying the amount that it was, and that is affecting the whole chain,” he said. “Carriers rely on the waste paper to get their empties back to China but volume is down everywhere. It is not just the recycling market that suffers but all the markets that rely on that volume.”
Ellin said the recycling of cardboard was a great example of circularity. The goods from China arrive in the United Kingdom and are delivered and unpacked. The boxes arrive at recycling points and are sent back to China in what would otherwise be empty containers.
