Quarterly Report – July 2019

As everywhere else, the recovered paper sector in Italy has evident problems but the approach is strangely contradictory. Domestic collections have been clearly exceeding local consumption; over the last 14 months, there has been a campaign to intensify collection activity, to the great satisfaction of municipalities in the south of the country where there is a chronic lack of thermal recovery plants for final disposal of their waste.

The result is that paper mills within the COMIECO circuit are strongly stocked - some at the limits of their capacity - and so there is now a net reduction in public collections. In some instances, the fire services have imposed fines on those infringing the upper limits of quantities held in stock.

There has also been a perceptible reduction in voluntary collections by industrial operators while, in parallel, professional collectors have cut their collections from industrial and similar sources and are not overly busy. Materials that require too much sorting/cleaning are being abandoned because of an evident lack of viability. Some claims from consuming mills concerning materials from COMIECO lines have been settled by inspectors to control the actual quality.

A major mill in Mantua is still encountering problems because a consistent quantity of recovered paper stock has been sequestered for inspection, and is faced with additional complications owing to the erection of some minor buildings without authorisation from the local municipality

At the end of June, OCC was Euro 5 lower at Euro 50 per tonne ex-works and was easy to source whereas mixed was enjoying a rebate of Euro 1 and is currently in good demand and not so available. Some overseas brokers have offered low ex-works prices that have not been accepted.

Exports of good, clean recovered fibre have been continuing in modest but constant volumes to destinations in both Europe and Asia.

Latest official data reveal that Italian paper and board production totalled 3.005 million tons in the first four months of this year for a decrease of 2.9% over the same period last year; there were year-on-year output declines of 10.8% for graphic, 3.1% for hygiene papers and 4% for packaging. Recovered paper consumption was 3.8% lower at 411,495 tons.

Comparing the opening quarters of 2018 and 2019, paper and board production was down 2% in the first three months of this year at 2.272 million tons whereas consumption increased by 1.3%. Paper and board imports dropped 6% year on year to 1.335 million tons and exports slid 8.8% to 919,624 tons. Total cellulose imports amounted to 807,880 tons, with semi-chemical on 774,300 tons. As for recovered paper, imports climbed 4.1% year on year to 95,588 tons while exports surged 27.3% to 498,500 tons.

Over the coming months, smaller recovered paper operators will be under severe pressure, particularly those with scarce available space and limited options for offering really clean material. Prices have fallen to historical lows, fulfilling the dream of Italian mills of being able to obtain secondary raw materials at the lowest price. It would be even better for them if raw materials were free or at a negative value, but that would require a complete structural change.

The Circular Economy concept is effectively a plan to solve the problem of waste, and specifically municipal waste, but hopefully this will be based on reality rather than idealistic dreams. Actually, operators have some concerns for August: many mills are supposed to stop production, with their warehouses full of raw material and also of finished product. There are some reasons to suppose that compulsory municipal collections will struggle to continue, with thermal recovery capacity already overburdened and available only in a few regions of the country.

The cost of eliminating waste or unsorted materials will sky-rocket and perceptions need to be modified to acknowledge the real viability of processes and the poisoning of the environment. Despite all the theories, all professional operators know that serious recycling is possible only at some cost to communities and that making money from waste is just a chimera. Better to say that recycling reduces where possible the cost of eliminating waste.

Giampiero Magnaghi - Giampiero Magnaghi (Italy)

Giampiero Magnaghi


Quarterly Report – July 2019