Cascades Recycling Market Update

April 8, 2019

As a result of China’s ongoing National Sword policy and the country’s continued reduction of imports of recycled fibres, specifically cardboard (OCC) & Mixed Paper, a global oversupply has resulted. Due to the high global supply, challenging/limited lo-gistics in non-China markets and minimal domestic solutions for these materials pric-ing has plummeted. With recyclers competing for material movement, the focus on clean, quality, source separated tonnage remain the key priorities to ensure movement now and into the future. Industry experts believe the lower value of these materials may be the new norm, however, the good news is that these materials remain highly recyclable and desirable in the production of new packaging products.

For mixed paper, one of the 24 banned items listed under the National Sword policy, the situation is bleaker. There is high oversupply especially since this material is less desired by end markets to remake new products. While industry will look to adapt in the future with how to handle these excess volumes (technology, source separation, alternative handling), the current reality is that these materials are harder to market and when movement is possible, are marketed at a higher cost than in the past. The result has been that these materials are often recycled at a charge versus a rebate like previously witnessed. This is especially true if quality specifications are not met and further handling of the materials is required to market the commodities.

Over the last 90 days, Cardboard (OCC) has also continued to decline to record low prices across the country. The future value of this commodity will continue to be volatile with China still committed to closing its doors to materials in 2020. As the price continues to drop there is a possibility that Cardboard will also move from a rebate to a charge and will be different market to market.

In these uncertain and changing markets, Cascades Recovery+ (CR+) has the benefit of our long-standing relationships with our own Cascades mills as well as other 3rd party mills. CR+ is able to ensure continued movement of all fibre recovered, while also continually exploring global market options so as to try and mitigate the market impacts on our customers. That being said, some commodities that provided positive cashflows have now fallen to a point charges may be put in place.

CR+ always strives to collect, process and bale the highest quality of recyclable materials, to realize the best price and ensure recyclability. As the quality targets continue to evolve, our team will continue to work hard to find valuable markets that lead to a positive end of life outcome for all materials. We will continue to engage with our partners through training and market updates to help us reach our quality goals and gain an overall understanding of the situation the industry is faced with. Material quality remains the highest priority not only on fibre but also for plastics.

Please continue to ensure CR+ receives and collects only clean and source separated recyclable materials. We would also ask that you try hard to keep materials as dry and free of moisture (rainwater) as possible to help protect recyclability and material value. For example, keeping materials stored under a covered area, covered bin or tarping the materials to protect them from the elements would allow for higher quality and increase the chance materials are recycled.

CR+ is committed to keeping our customers involved and informed as the market situation develops. Our teams will continue to work hard to educate our partners so that we receive, process, bale and market the best quality materials possible. We are confident taking these important steps will ensure the desire we all share to minimize waste will not be compromised by the current market changes.