January 12, 2019

Scrappy export stands up to trade-war headwinds

West Coast port sees rise in scrap paper exports despite escalating trade tensions.

By DC Velocity Staff

The ongoing trade war with China and a rising U.S. dollar have created serious headaches for exporters, dampening overseas demand for goods ranging from soybeans to steel.

Amid the turmoil, however, one product is flourishing: scrap paper. The Port of Oakland recently reported that exports of scrap paper were up 3 percent in the first 10 months of 2018. From January through October, the port shipped 110,400 20-foot container equivalent units (TEUs) of wastepaper—which accounted for nearly 18 percent of Oakland's total export volume. Port data indicate that nearly all of the recyclable paper went to Asia, where the product is used primarily to make packaging for billions of dollars' worth of Asian goods exported back to the U.S.

What makes this all the more remarkable is that the boom has occurred despite a sharp drop in demand from Oakland's top trade partner, China. China reduced scrap paper shipments from the port by 37 percent through the first 10 months of 2018. But neighboring Asian countries have picked up the slack. Oakland's scrap exports to Taiwan were up 522 percent in 2018, while shipments to Vietnam were up 344 percent.

"We can't be certain if this [upward] trend will last, but the figures seem to show that there's no loss of demand globally," Port of Oakland Maritime Director John Driscoll said in a release. "It appears that shippers are finding new markets for their scrap paper products."

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