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Printers may have to pay for waste paper collection

Thursday, 18 August 2005
By Print 21 Online Article

Lower pulp prices and increased recycling of paper and paperboard have meant global demand for recovered paper has now fallen behind an increasing supply, according to a report in this month’s issue of industry bible Pulp & Paper Edge. www.industryedge.com.au

Robert Eastmant, editor, (pictured) claims the recent high prices enjoyed by the industry are unsustainable due to a growing international surplus of recovered paper and paperboard. He maintains there will inevitably be downward price movements for various grades of wastepaper over the next few months.

His sophisticated analysis of the market that has seen printers and paper merchants paid for their pre-consumer waste, highlights factors such the swing by paper mills towards an ever increasing supply of virgin pulp. The result is that the proportion of recovered paper being utilised internationally to pulp is now at an eight-year low.

Supplies of waste paper are currently outstripping demand in many of the Asian countries as well as in Australia. The stronger Australian and New Zealand dollars has meant that exporters here have had to discount selling prices to enable trade to continue. The result has been that export prices have fallen well below what domestic processors are paying. The cost of ocean freight has also placed downward pressure on export prices.

Tissue mills in Brisbane are processing additional pulp to maintain the quality of tissue products resulting in lower demand for recovered paper. The de-inking facility at the Australian Paper mill at Shoalhaven is understood to be shutting down for the last two weeks of August, which will be followed by a fall in demand for recovered paper from Indonesia and Malaysia from mid-October to early November as the mills there close for Ramadan.

This will be compounded by demand from domestic paper mills continuing to remain weak. The current focus by the NSW government to introduce extended producer responsibility (EPR) for a number of waste streams of concern, including office paper, is likely to end in legislation forcing increased recovery of selected wastepaper grades. The other states and territories are then expected to follow with similar legislation once EPR has been enacted in NSW.

Eastmant concludes; the notion of keeping commercial wastepaper out of landfill is both socially and environmentally laudable. However, from an economic perspective there is likely to be market failure if state governments push through EPR legislation without economic benefits to the industry. Costs will be incurred by companies providing collection services, while there will be diminishing opportunities for the same companies to obtain sufficient returns to make the service sustainable.

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