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Weak Chinese packaging demand causes plummeting US wastepaper exports
FALLING US wastepaper exports contributed 5.2 per cent to the decline in overall American exports in the first half of 2015, because of weak demand in China and a strong dollar.
Chinese demand for recycled paper is slowing. From 2000 until 2013, China rapidly expanded its papermaking production with mills voraciously consuming corrugated cardboard used in packaging.
"But there's fewer finished goods going in Europe, so there's less need for boxes and less need for recycled paper to make those boxes," said Bill Moore of Moore & Associates, an Atlanta consultant specialising in wastepaper.
While still the highest volume US containerised export, outgoing wastepaper fell by 129,785 TEU in the first half. The 30 per cent drop represented more than a third of the 367,000-TEU year-on-year decline in total American exports, according to PIERS data.
Other low-end containerised exports - scrap metal, wood pulp, miscellaneous chemicals and distillers dried grain - fell by an additional 100,000 TEU.
Exporters got off to a terrible start this year, as tens of thousands of containers were stranded by west coast port slowdowns during longshore contract negotiations. Total boxed exports fell 14 per cent in January and dropped by single digits in every in the first half.
The 5.2 per cent decline in total US containerised exports as concentrated on the west coast, where port gridlock caused first-half TEU volume to plummet 17 per cent. Especially hard hit were low-value commodities such as recycled paper, which has an outsized impact on US export volume.
Sixteen shippers on this year's JOC Top 100 Exporters list specialise in wastepaper that goes primarily to Chinese mills for recycling into packaging material. American Chung Nam is the highest-volume containerised-cargo exporter, with 335,400 TEU last year.
The west coast port delays magnified the impact of already-sluggish Chinese demand for recycled paper, said Mr Moore, adding that he doesn't expect a quick rebound. "The second half may not look a lot different from the first half," he said.
Though west coast ports have cleared backlogs, Mr Moore said wastepaper exporters are still recovering. Many shipments were delayed as carriers and terminals prioritised high-value imports.
Chinese demand for recycled paper is slowing. From 2000 until 2013, China rapidly expanded its papermaking production with mills voraciously consuming corrugated cardboard used in packaging.
"But there's fewer finished goods going in Europe, so there's less need for boxes and less need for recycled paper to make those boxes," said Bill Moore of Moore & Associates, an Atlanta consultant specialising in wastepaper.
While still the highest volume US containerised export, outgoing wastepaper fell by 129,785 TEU in the first half. The 30 per cent drop represented more than a third of the 367,000-TEU year-on-year decline in total American exports, according to PIERS data.
Other low-end containerised exports - scrap metal, wood pulp, miscellaneous chemicals and distillers dried grain - fell by an additional 100,000 TEU.
Exporters got off to a terrible start this year, as tens of thousands of containers were stranded by west coast port slowdowns during longshore contract negotiations. Total boxed exports fell 14 per cent in January and dropped by single digits in every in the first half.
The 5.2 per cent decline in total US containerised exports as concentrated on the west coast, where port gridlock caused first-half TEU volume to plummet 17 per cent. Especially hard hit were low-value commodities such as recycled paper, which has an outsized impact on US export volume.
Sixteen shippers on this year's JOC Top 100 Exporters list specialise in wastepaper that goes primarily to Chinese mills for recycling into packaging material. American Chung Nam is the highest-volume containerised-cargo exporter, with 335,400 TEU last year.
The west coast port delays magnified the impact of already-sluggish Chinese demand for recycled paper, said Mr Moore, adding that he doesn't expect a quick rebound. "The second half may not look a lot different from the first half," he said.
Though west coast ports have cleared backlogs, Mr Moore said wastepaper exporters are still recovering. Many shipments were delayed as carriers and terminals prioritised high-value imports.
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