Higher freight costs and rising prices over the past nine months are being given as factors in an expected downturn in the waste paper market for April.
The grade hardest hit is likely to be mixed papers which includes material that comes out of materials recycling facilities. It can be used to make cardboard but is suffering as Chinese buyers step back from the UK market because of high costs and difficulties in the freight market.
Chinese demand for UK waste paper is important because the UK only uses about half of the material collected and the remainder is exported with the largest volume going to China.
Prices are also heading downwards for used cardboard and other grades may be hit as well.
Shipping rates have already increased dramatically in recent months with until now the Chinese buyers largely absorbing the extra costs and continuing to pay higher amounts for material.
Recently prices for containers have risen by about $500 towards the $2000-2,250 mark and further increases to as much as $2,500 per container are possible. These rises increase the shipping cost per tonne of waste paper for the exporting business.