Analysis on Supply of and Demand for Waste Paper in China, 2019-2021
1. Supply Side: Waste Paper Imports to Decrease Further
China’s policies only waste paper imports will become stricter. In 2020, the import of waste paper will be completely prohibited. In 2018, the approved quota for waste paper imports was 18,155,400 tons, decreasing by 35% from 28,068,800 tons in 2017. It is expected that the quota for and volume of waste paper imports will continue to decline in 2019 and 2020, and the quota will be around 10 million tons in 2019.
Research Report on Paper and Paperboard Import in China, 2019-2023
Research Report on Papermaking Industry of China, 2018-2022
The volume of domestic waste paper has limited growth potential and the recycling rate can hardly see dramatical growth in the short term. Currently, the global recycling volume of waste paper is around 250 million tons with a slow and stable growth rate. China and the U.S., the major waste paper producers, both contribute about 20% or 50 million tons to the global recycling volume. However, China has a great demand for waste paper and the recycling rate is very low. Even though domestic waste paper is only for domestic consumption, about 1/3 demand cannot be satisfied. To fill the gap caused by the reduction of waste paper imports, the recycling rate of domestic waste paper must be increased.
Research Report on Paper and Paperboard Import in China, 2019-2023
Research Report on Papermaking Industry of China, 2018-2022
The recycling rate of waste paper in China has great growth potential but rapid growth can hardly be achieved in the short term. The recycling rate is about 50% in China, which is much lower than over 70% in European and American countries. Because of incomplete recycling system and fragmented industry, China’s recycling rate of waste paper can hardly see a rapid increase in the short term. With the sharp decrease in imports and insufficient growth in domestic recycling volume, the supply of waste paper in China will decline in the next two years.
Research Report on Paper and Paperboard Import in China, 2019-2023
2. Demand Side: Market is Stable with Limited Growth
According to CRI, in 2017, there were about 2,800 paper and paperboard manufacturers in China. The production volume of paper and paperboard in China was 111.30 million tons, increasing by 2.53% YOY; the consumption volume was 108.97 million tons, increasing by 4.59% YOY; the consumption volume per capita was 78 kg (calculated based on a population of 1.39 billion). The consumption of wrapping paper reached about 78 million tons at a growth rate of less than 1%. With the fast development of industries such as e-commerce, China’s wrapping paper industry has grown mature and thus has limited growth potential.
Research Report on Papermaking Industry of China, 2018-2022
Research Report on Paper and Paperboard Import in China, 2019-2023
3. Estimated Supply of and Demand for Waste Paper in China, 2019-2021
Demand side: CRI estimates that the consumption of waste paper in China will grow by 550,000 tons in 2019, 550,000 tons in 2020 and 600,000 tons in 2021 at a CAGR of 0.50% to 1%.
Supply side: The current recycling volume is 50 million tons. With an annual increase of 0.50% in the recycling rate, the recycling volume will grow by 1.50 million tons in 2019, 1.55 million tons in 2020 and 1.60 million tons in 2021. The import volume of waste paper is estimated to be 18 million tons in 2018, 10 million tons in 2019, 5 million tons in 2020 and 0 in 2021.
Research Report on Paper and Paperboard Import in China, 2019-2023
According to CRI’s calculation, the gap in waste paper supply will be 7.05 million tons in 2019, 4 million tons in 2020 and 4 million tons in 2021. With the sharp fall in imports and shorter supply of raw materials, the prices of domestic waste paper are expected to go up in 2019.
Research Report on Paper and Paperboard Import in China, 2019-2023