The last month has been about Brexit and Covid, although you could say that has been the case for the past year.
But a combination of the end of the Brexit transition period and the new deal signed before Christmas, plus a new national lockdown has meant this has been a particularly tricky period for the market.
At IWPP, we put a lot of work into preparing for Brexit a long time ago. I spoke to a haulier last summer who said that, whatever deal Boris Johnson agreed with the EU, it would lead to more customs checks and paperwork.
As we got closer to the deadline for a deal, the work got harder in trying to understand what this would mean for us and the wider recycling industry.
It wasn’t until Christmas Eve that we got the deal, and then as I mentioned in the REB Market Intelligence article on the realities of shipping to Europe, it took a lot of effort over the period between Christmas and New Year to get to the bottom of it. This continued into January and even now we still have to work things out fully.
We’ve been managing to keep material moving as the mills we work within Europe saw the value of the fibre we provide them with and wanted to keep giving us orders. They have helped us to understand all of the import regulations we are now subject to.
Indeed, that is one of the key aspects we have had to learn about. While the UK Government negotiated a deal with the EU as a whole, we now have national regulations for each country we have to get used to. It would be useful if the UK Government acknowledged this and provided more support and guidance on not just dealing with the EU, but national regulations in EU countries too.
Even this week, I’ve discovered that some countries have different rules on what you call an invoice for taxation purposes, and have to get to the bottom of whether you need to call it a commercial invoice or pro-forma invoice. This was the sort of thing we never had to think about before.
Different haulage firms also want different paperwork even if you are sending material to the same mill through the same port. The amount of form filling has risen substantially.
Covid of course has its challenges too and has changed the way all of us have had to operate. With the current national lockdown, we’ve also had to deal with low generation of material, with more going via the domestic waste stream due to more online shopping occurring again.
But it also seems like more people are saving rather than spending, and those domestic volumes don’t seem to be as high as they were, especially at a time when there are reported shortages of pulp, leading to less finished product available.
We’ve had good prices for OCC and good demand from the mills.
EU mills that I have been dealing with know they need UK material and are prepared to help us get it there.
I don’t see demand dying down for many months and would expect the high prices we are currently seeing to last, especially as there appears to be a shortage of pulp to created finished product.
With competition also coming from India, South East Asia, Turkey and elsewhere, this low supply and strong demand should keep the market buoyant.
This grade really is the darling of the paper industry.
A year ago, mixed seemed dead and buried and I was having to pay £50 to get rid of it, but now I’m getting good prices for it instead.
It is remarkable how much the turn around has been for mixed paper. It is not just packaging mills that are buying it, but newsprint mills are interested in soft mixed for the news & pam content, while even de-inking mills have been having a dabble if there is enough office grade fibre in it.
News & pam
This grade continues to bumble around. With free papers on public transport having lower circulation, and people making less journeys to newsagents and supermarkets, there isn’t a great deal of it around, or demand for the finished product.
I’m struggling to get orders for this grade at the moment, which suggests demand for it isn’t there. The reasons aren’t exactly clear, but it was similar last year and then the market heated up. Maybe, this is just a market correction.
Chris Burton is commercial director of IWPP