Matson profit up 185pc to US$232 million on tax break, but sales flat

BRITISH waste exporters in are crisis mode because of China's ban on imports of recyclables that are backing up and sending shippers scrambling to find new ways to dispose of 80,000 TEU a year.

China completely banned post consumer plastics, about 400,000 tons per year. There was also a complete ban on mixed paper exports to China that are as much as 1.1 million tons a year.

"This has cut the numbers of containers our members export by 40 to 50 per cent," said UK Recycling Association CEO Simon Ellin.

China is granting limited import licences for cardboard in 2018, and Mr Ellin said because they need the long fibre the US market supplies, China was prioritising US tonnage.

"It will be very difficult for our UK members. We are trying to find alternative markets but they are rapidly getting full," he said.

Other markets are India, Vietnam, Indonesia, and Malaysia, but London's Drewry Maritime Research analysts said they lack capacity comparable to China's.

China imports about 30 million tonnes (33 million tons) of wastepaper each year, along with eight million tonnes of waste plastics, roughly the same as the rest of the world put together.

The ban had made the business very challenging, especially with the United States expected to win a greater percentage of the fewer import licences being issued.

"China's mills prefer US material because of the longer fibres. The number of import licences 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," said Cycle Link International logistics chief Gary Waters.

"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," said Mr Ellin.

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.

Mr Waters said he 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 then 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 it was, and that is affecting the whole chain," said Mr Waters. "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."

Mr 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 empties.

Carriers use recyclable waste bales to build up load factors on lower demand backhaul routes.

Source: Schednet

Previous Next

Quality Seafarers Will Always Remain in Demand: Capt Vijay Rangroo, Managing Director, MTMSM

View More Videos


India Tanker Shipping Trade Summit 2018

View All Albums