Recycling industry insights reveal a positive trend in the market for kerbside paper and paperboard packaging. Global pulp prices experienced a significant uptick due to supply challenges, impacting all fiber costs. The first half of 2024 saw an increase in mixed recovered paper prices, stabilizing local market conditions. Notably, new retail-focused products made from recovered fiber have absorbed some volumes, contributing to market growth.
Australia’s recovered paper exports surged by almost 7% in the year leading up to March 2024, with Victoria’s exports mirroring this growth by rising 8%. Indonesia remains a key market, fueled by industrial demand for packaging materials in Southeast Asia and China. The demand for recovered fiber has been driven by China’s fiscal stimulus and rising virgin fiber pulp prices, leading to increased interest in secondary and alternative fibers.
The market dynamics underscore the importance of tight fiber supply balances. Pulp supply disruptions in key regions like Finland and Chile resulted in a sharp decline in inventories, propelling pulp prices upward. This price surge, however, did not translate to corresponding increases in paper and board product prices, leading to heightened demand and prices for recovered paper.
Global industrial production stagnation over the past two years, amidst inflationary pressures, has impacted the volume of recovered paper generated in countries like Australia. While there has been marginal additional export supply from Australia, industry experts believe this is more of an inventory adjustment than a response to softer domestic demand for recovered paper.
Domestic demand for recovered fiber remains stable, with the market seeing an uptick in alternative and retail-focused products as replacements for soft plastics. The launch of products like Visy Tread, manufactured entirely from recovered paper, signals a growing trend towards sustainable industrial solutions.
In terms of pricing, global fiber prices surged until March 2024, prompting a shift towards alternative fibers when major paper manufacturers struggle to recover costs. Australia’s supply, particularly high-quality Old Corrugated Cartons (OCC), has maintained consistent demand in the market.
Export and interstate market reviews indicate a rise in Victoria’s exports of mixed recovered paper, with interstate trade flows increasing since early 2024. While some exporters are looking to offload stock before the impending export regulations take effect, there is no evidence of reduced pricing or fire sale practices in the market.
The introduction of export licensing for mixed recovered paper is expected to have minimal impact from mid-2024 onwards. However, market opportunities lie in the development of new products that reduce reliance on exports and enhance domestic self-sufficiency. Supply chain adjustments are likely due to these export regulations, with a focus on recycling fiber into corrugated packaging for sustainability.
As the recycling industry continues to evolve, the push towards circular economy principles and sustainable practices remains at the forefront. The market for kerbside paper and paperboard packaging shows resilience and adaptability in the face of global economic shifts and regulatory changes, paving the way for a more sustainable future in the recycling sector.
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