The Paper Trial - Paper Prices

While paper recycling is well established in Canada, keeping paper and paper products out of landfills is not without its challenges.

Like other commodities, recovered paper prices are cyclical and determined by a variety of global factors. When economic activity slows down, people buy fewer 'things', which reduces the demand for cardboard boxes, which most 'things' are shipped in. Since cardboard boxes are made with an average of 59% of recycled content, this causes demand for OCC (old corrugated containers) to fall as well.

OCC prices are also affected by the level of imported goods, as most imports are packaged with cardboard made in the importing country. This is especially true as more cardboard box plants are being built in Asia. So the OCC price in Saskatchewan may in part be determined by business decisions made in China.

Similarly, if the economy slows down, ONP (old newsprint) prices fall as well. With lower sales, retailers spend less on advertising and the demand for newsprint (and ONP) falls (fewer ads, smaller newspapers).

The general price trends for ONP, OCC and mixed paper can be seen on the price graph above. In the last 12 years, the price of newsprint has gone from $5/tonne to $214, back down to $31 and is currently around $80/tonne. Price fluctuations as severe as these make it difficult to run programs and recycling businesses.

Of course the complaining is loudest when prices are low, as is the case right now. The price of OCC has in many cases dropped below the cost of processing.

Such price swings threaten the stability of recycling programs, and point to the need to look at other funding mechanisms (like product stewardship^*) to ensure consistent programs and to keep paper from being landfilled during the down-cycles.

Beyond price changes, paper recyclers face other challenges as well. When waste paper is de-inked, the mixture of leftover ink and debris, called sludge, can make up to 30% of the volume of the original waste paper. While some uses exist for sludge, depending on its content, this volume of material is a significant problem for recycling mills, and some of the sludge does end up in landfills.

Another headache for paper recyclers, as it is for all recyclers, is contamination. Sticky paper, different types of paper and non-paper items all cause problems in the recycling process.

As with many issues, paper collection and recycling are more complicated than they look.

^* For a discussion of product stewardship, visit Environment Canada's page on Extended Producer Responsibility & Stewardship

(Source: June 2001 WasteWatch)

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