China's ban on waste imports leads to piles of paper, surging prices

REUTERS
HONG KONG
Published 28.09.2017 19:35
Updated 28.09.2017 19:36
Tons of waste paper to be shipped to mainland China piled up at a dock in Hong Kong.
Tons of waste paper to be shipped to mainland China piled up at a dock in Hong Kong.

While Beijing has imposed a ban on mixed waste paper, the price of finished paper has doubled, and it is hurting everyone from e-commerce sites to exporters considering 31 billion packages were delivered in China in 2016

Huge mountains of old newspapers, cardboard and office scrap paper are piling up on Hong Kong's docks and its waste-paper collection sites are at bursting point. A flotilla of cargo ships laden with paper meant for recycling has been stuck for weeks in local waters. The city's system for dealing with its paper waste has been failing since China in July imposed a ban on imports of 24 types of rubbish, as part of a campaign against "foreign garbage" and environmental pollution, including unsorted scrap paper. Each day in Hong Kong, 2,500 tons of fresh paper waste is piling up with no place to go, according to Jacky Lau, director of Hong Kong's main recycling business association.

"We started our business 50 years ago and we have never experienced such a crisis," Lau said, saying the industry was losing HK$2.7 million ($346,000) daily. Traditional suppliers of waste paper to China include Europe, the U.S., Hong Kong, Japan and Southeast Asia, according to industry associations.

While China indicates it will impose an outright ban on mixed waste paper, a final decision isn't expected until November. For now, authorities have tightened requirements on waste paper to markedly cut back on allowed levels of contaminants, making it difficult for many recyclers to meet. As a result of the impasse, the manager of a major paper mill in southern China told Reuters the price of finished paper had doubled to 6,000 yuan ($902) per ton from 3,000 yuan as supplies of the raw material shrink. That is hurting everyone from e-commerce sites to exporters. Alibaba's upcoming "Singles' Day online shopping festival on November 11, which posted more than 120 billion yuan ($18.1 billion) in sales last year, is heavily reliant on such packaging. The U.K.'s Environmental Services Association said the restrictions would ripple beyond China.

"Online retailers like Amazon still need cardboard boxes and most comes from China," said Jakob Rindegren, the recycling policy adviser of the U.K. association. One corrugated box retailer on the online shopping site Taobao reached by Reuters, said the price of cardboard boxes had nearly doubled since the end of August to 8.8 yuan ($1.33) each. Thirty-one billion packages were delivered in China in 2016, according to another online retailer JD.com in a statement. The company said it was seeking to markedly cut back on cardboard usage on environmental grounds.

The bans, which also include other forms of waste material - plastic, tyres and glass - have also had a wider impact on waste shipments to China. Maersk Line, the world's largest shipper of containers, said it has already seen a drop in waste cargo into China.

In a customer notice on Sept. 26 German container shipper Hapag-Lloyd, the world's fifth largest container line, said it would stop accepting cargoes of scrap plastic and waste paper from Europe, the U.S. and Asia that are due to arrive at Chinese ports after Dec. 31.

For now, as Hong Kong's paper mountains grow daily, many of the city's invariably elderly paper collectors say they've seen a vital source of income halve in some cases, with many recyclers no longer accepting scrap as the uncertainty lingers. China, the world's largest paper recycler, produced some 63.3 million tons of waste paper pulp in 2016, according to the China Paper Association (CPA), with some 24 percent produced from imported waste paper.

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