'Paper Shortage Crisis' Intensifies...Pulp and Paper Industry Urges Government to Increase Stockpiles

Demand for paper recycling plummets due to economic recession "No place to store"
Ministry of Environment stocks 19,000 tons... Paper industry "Government should directly purchase and increase stockpile"

We used to send waste paper twice a day in compressed bales, but since last week, we have been sending it only once, causing the waste paper to gradually pile up inside the B Resource site. Choi, the representative of B Resource, is looking at the growing pile of waste paper.
[Photo by Kim Jonghwa]

[Asia Economy Reporter Kim Jong-hwa] "There’s nowhere to pile it up, so there’s no way around it."

Choi, the representative of B Resources, which collects waste paper (paper resources) in Hannam-dong, Yongsan-gu, Seoul, and supplies it to a compression facility, sighs as he watches the piling waste paper. B Resources transports 5 tons of waste paper twice a day to a compression facility in Namyangju City, but since last week, the compression facility notified them that it would only accept one truckload per day. Earlier this year, the price of waste paper was 140-150 KRW per kilogram, but it has dropped to 70-80 KRW per kilogram. Although they need to send as many truckloads as possible to make a profit, they are now sending fewer loads, which is frustrating.

Choi said, "We can’t refuse the elderly who consistently bring waste paper every day because their livelihood depends on it, which is a headache. The compression facility is also being more stringent about impurities, so as middle collectors, we’re having a hard time." B Resources buys waste paper collected by the elderly at 60 KRW per kilogram and sells it to the compression facility at 70-80 KRW per kilogram. The compression facility compresses the waste paper so it can be processed as raw material for paper and delivers it to paper mills, but the paper mills are reluctant to accept more waste paper, saying there is no more storage space.

Waste Paper Crisis Intensifies... Due to Sharp Decline in Demand Amid Economic Downturn

The waste paper crisis is intensifying because there is an oversupply of waste paper. The global economic downturn has reduced demand for paper and decreased production, leading to a sharp drop in demand for waste paper, which is the raw material for paper.

According to the paper industry on the 25th, as of the 13th of last month, the stockpile of waste paper at paper mills was about 148,000 tons, double the usual stock of 70,000 to 80,000 tons. As paper mills are unable to reduce their inventory, about 58,000 tons of stockpile have also accumulated at compression facilities.

As of last month, the nationwide average price of waste paper was 135.2 KRW per kilogram for newsprint, down 9.8% from 149.9 KRW in September last year, and 107.8 KRW for corrugated cardboard, down 27.1% from 147.9 KRW in September last year. The actual income of collectors and elderly collectors is even lower than these prices.

Mr. Lee (72, right in the photo) is collecting waste paper in the Itaewon-dong area.
[Photo by Kim Jonghwa]

Lee (72), who collects waste paper using a truck in the Itaewon 1 and 2-dong areas of Yongsan, Seoul, said, "Earlier this spring, I received 140 KRW per kilogram, but these days, there are hardly any junk dealers willing to pay even 60 KRW per kilogram," adding, "If I don’t make rounds with the truck, the waste paper piles up quickly, and I have to collect it every day for my livelihood."

When waste paper is oversupplied and prices fall, there is no profit, so neighborhood junk dealers stop accepting waste paper collected from the area. When there is nowhere to sell the collected waste paper, elderly collectors face threats to their livelihood and stop picking up more waste paper, leaving it piled up in alleys and streets.

Ministry of Environment Stocks 19,000 Tons... Paper Industry Calls for Increased Reserves

As waste paper piles up, the Ministry of Environment has requested five major paper mills, including Hansol Paper, to pre-purchase 19,000 tons of waste paper. The waste paper purchased by the paper mills will be transported with transportation costs supported by the Ministry of Environment to six public storage facilities nationwide and stored for nine months until June next year.

The yard space on paper mill factory sites is already saturated, and the yards of compression facilities, mostly located in greenbelt areas, are small and face constant complaints, so the government facilities must be used. To resolve this collection backlog, the Ministry of Environment has expanded storage facilities this year by adding two more locations in Eumseong, Chungbuk, and Yangju, Gyeonggi, in addition to four existing public storage facilities in Anseong, Gyeonggi; Cheongju, Chungbuk; Jeongeup, Jeonbuk; and Dalseo, Daegu.

However, the paper industry hopes the Ministry of Environment will send a bolder signal to the market, as the 19,000-ton stockpile is only a short-term measure and there is no alternative other than economic recovery. A paper industry official said, "With inventory exceeding 200,000 tons, pre-purchasing only 19,000 tons and offering storage is just for show," adding, "Just as the Ministry of Agriculture, Food and Rural Affairs stocks government rice, it would be good if the Ministry of Environment stocked more waste paper during this oversupply period and provided it when times are tough."

South Korea lacks forest resources, so the recycling paper industry, which mainly uses recycling technology, leads the paper industry. Last year, the waste paper recovery rate was 65% in the U.S. and 50% in China, but South Korea’s was 87.4%, the highest in the world. About 80% of the total paper production of 11.6 million tons last year was made from waste paper, making waste paper an essential resource for the domestic paper industry. This means the government should directly purchase waste paper and increase stockpiles rather than just requesting pre-purchases from paper mills.

Regarding this, Kim Sang-hoon, head of the Household Waste Division at the Ministry of Environment, explained, "This measure is to reduce about 19,000 tons out of the 58,000 tons of inventory by accepting applications from compression facilities so they do not refuse collection. We recognize this is a crisis situation, but it is not yet an emergency," adding, "We are monitoring the situation and may increase stockpiles further. We are closely watching to prevent a collection refusal crisis."

This content was produced with the assistance of AI translation services.