With paper and cardboard making up more than half of all recycled materials, it's clear that a vast network of people is involved in buying and selling these resources. But who determines its value? And what factors influence the price of different recyclable materials?

‍

Let’s find out.

‍

Where there is demand, there is a supply struggling to catch up

‍

Like any commodity, recovered paper prices are primarily driven by the fundamental principles of supply and demand. When companies across various industries ramp up their production and require more recycled paper to meet sustainability goals or create products, the demand increases.

‍

However, if the supply of recovered paper doesn’t keep up, whether due to collection challenges, processing limitations, or seasonal shortages, prices inevitably rise as buyers compete for the available material.

‍

On the other hand, if the supply of recovered paper outstrips demand, perhaps because of a decline in recycling rates or lower consumer demand for recycled goods, prices tend to fall. In such cases, sellers may struggle to find enough buyers, and the market becomes oversaturated.

‍

When too much material is available, the surplus leads to price reductions as sellers aim to offload excess loads.

‍

But who decides the price? 

‍

In the recovered paper market, there is no single entity setting the prices. Instead, the value of recycled paper is largely determined through negotiations between buyers and sellers in a competitive marketplace.

‍

Recyclers, paper mills, and other buyers all have a hand in determining what they’re willing to pay, often influenced by market conditions, availability, and regional factors.

‍

Additionally, pricing is influenced by broader economic forces, such as global trade agreements, energy costs, and fluctuations in the demand for paper products. For example, if global supply chains are disrupted, the cost of transportation can increase, affecting the price of recovered paper.

‍

Shifts in policy, such as stricter recycling regulations or changes in environmental standards, can also play a significant role in shaping the market dynamics.

‍

Ultimately, the price is the result of a constant push and pull between supply and demand, influenced by both short-term factors and long-term trends. As these forces evolve, so does the cost of recovered paper and board materials.

‍

Influential players that also take part in shaping the market

‍

In addition to the broader forces of supply and demand, paper mills and recycling processors also play a part in shaping the pricing of recovered paper, for example, through their purchasing behavior.

‍

For instance, when a major paper mill suddenly ramps up its purchases of recovered paper, perhaps in response to a surge in demand for paper products, a new production line, or an expansion of capacity, can create immediate pressure on local supplies.

‍

In such cases, local prices may spike as mills compete for available material. Or, if a mill temporarily shuts down or reduces its intake of recycled paper due to economic challenges, maintenance issues, or changes in production capacity, this can lead to a sudden drop in demand, and consequently, a decrease in local prices.

‍

Recycling processors also influence prices. They act as intermediaries, collecting, sorting, and preparing paper for mills. If supply is plentiful but demand is low, processors may lower prices to manage excess material. On the other hand, a shortage of recovered paper can push processors to raise prices to attract more sellers.

‍

These choices, whether driven by market conditions, production needs, or logistical challenges, cause price fluctuations and influence the broader recovered paper market.

‍

So, how are these prices decided on? 

Technically, no one person or entity has the final say. It’s a complex tug-of-war between supply and demand, shaped by global trends, industry indexes, and buyer behaviour.

‍