An Unsettled Future for China's RCP Market: Impact on Regional Markets and Company Strategies

Since the beginning of 2018, changes in China’s recovered paper (RCP) policy have disrupted the country's corrugated packaging growth and global RCP trade flows by redirecting exports away from China to India and Southeast Asia. A potential import ban for all RCP by the end of 2020 could trigger a new round of disruptions.

According to Natasha Valeeva, Senior Analyst – F&A Supply Chains: "These disruptions create more demand for domestic RCP and incentivize chain actors to ramp up domestic recycling in China. These efforts will, however, not ensure sufficient RCP supply in the short term. Imported recycled pulp and containerboard will continue to cover the current RCP gap."

Driven by the changing market conditions, China’s paper packaging companies are very active throughout the pulp, paper, and recycling chain to secure stable fiber supply locally and from abroad. As a result, this also creates uncertainties and disruptions in other regional markets.

Valeeva: "For the main RCP exporters like the US and Europe, China’s move towards zero RCP imports will likely force additional RCP export tonnage to stay local. With limited growth opportunities in new markets, substantial investments in innovative ‘quality’ recycling infrastructure remain a necessary step in these countries."