The European-based paper company Norske Skog has announced that it will temporarily idle one of its paper machines at its Walsum paper mill in Germany by the second half of December. The company did not say how long it would idle the machine.

The company cites excess capacity in the coated mechanical paper market as the reason for the shutdown. The machine has an annual capacity of 225,000 metric tons. The mill’s second machine, which produces lightweight coated magazine paper, will continue to operate at the site. That machine has an annual capacity of 200,000 metric tons.

The company says the temporary idling of capacity is needed to bring supply and demand into balance, while avoiding unprofitable production at the mill. Sven Ombudstvedt, CEO and president of Norske Skog, says that despite years of great efforts of the staff to reduce costs, the decision is unfortunately unavoidable. The company adds that customers will be served from other Norske Skog mills and paper machines and all existing supply commitments will be honored.

Prices continue to be soft for most nonferrous metals, though lack of supply is a greater concern among scrap dealers.

After a fairly significant decline in pricing earlier this year for a number of nonferrous metals, including copper scrap and aluminum scrap, prices have stabilized as summer comes to a close. However, many scrap metal dealers say the bias in pricing is toward the downside during the next several months.

Market observers continue to look to the U.S. economy for clues as to which direction nonferrous metals markets may move through the end of 2013. The remaining uncertainty in the U.S. economy, particularly regarding the Federal Reserve’s next step, has kept prices from breaking out toward the upside.

Concerns about the possibility of the Federal Reserve pulling back its bond buying have created apprehension in metals markets. In anticipation of the change in fiscal policy, industrial metals markets have further softened. However, more recent economic figures, including a lackluster employment report and soft retail sales, may delay the expected changes to the Federal Reserve’s bond-buying policy and give some life to nonferrous metals markets.

While federal macroeconomic policies have a longer-term effect on markets for copper, aluminum and nickel/stainless, in the short term the challenge of finding enough material to meet orders is top of mind with scrap dealers. During the past six months, scrap metal dealers have said the lack of available scrap has created significant challenges.

Along with the uncertainty about the U.S. economy, many scrap metal dealers continue to watch China, which consumes 40 percent of the world’s copper.

Getting a handle on the relative health of the Chinese market continues to be a challenge for many scrap metal exporters. One market watcher says improving copper scrap orders to China have less to do with increased demand than with buyers in China who are covering supply shortages.

However, recent signs indicate that the Chinese economy may be improving. One Chinese government report, filed in early September, notes that the country’s industrial production has increased sharply in August compared with August 2012. Another report, published by China’s General Administration and Accounting Office, shows China’s exports increased 5.1 percent in August, topping expectations.

The aluminum sector, which also has been struggling over the past several quarters, is being affected by the continued oversupply of the metal on the global market. Even with a number of mill capacity shutdowns in the last year, too much aluminum capacity remains on the market.

Reflecting the longer-term structural challenges affecting aluminum, stocks on the London Metal Exchange stand at 5.35 million metric tons. While the figure is down slightly from the 5.5 million metric tons this summer, it is still so high that it likely will keep a lid on pricing.

Demand for aluminum, however, remains fairly healthy. The automotive sector remains one of the strong areas in the U.S. economy and a considerable consumer of aluminum. Despite this healthy end market, scrap recyclers say they do not see an overall upswing in aluminum pricing.

Sarah Dolinar of the New York City Department of Sanitation (at podium) updates attendees of WasteCon 2013 on New York City’s selection of a waste conversion technology. Susan Raila (at left) and Joe Murdoch (center) of HDR Inc. also participated in the discussion.

As New York City looks at its future waste management needs, waste conversion technologies are part of the equation. During the Solid Waste Association of North America (SWANA) 2013 WasteCon conference in Long Beach, Calif., a technical session titled “New York City’s Waste Conversion Technology Pilot- is the Technology Ripe Enough for the Big Apple?” addressed where the city is at in the evaluation of technologies to handle the estimated 50,000 tons of waste and recyclables the city generates each day.

Sarah Dolinar, director of environmental review for New York City Department of Sanitation (DSNY), along with Susan Raila, project manager with the consulting firm HDR Inc., Omaha, Neb., brought attendees up to speed on the city’s past, present and future waste management strategies. Dolinar discussed how in the 1980s the city’s waste was handled within the city with five landfills, eight marine transfer stations and five incinerators, along with many apartment incinerators.

Dolinar said a waste-to-energy (WTE) project that took 11 years to evaluate was once proposed but was never built. And a proposal to build WTE facilities in each of the five boroughs was waylaid, she added. By the time 1996 came around, only one landfill, Fresh Kills, remained and it was scheduled to close in 2001. The city needed to come up with a new solid waste management plan (SWMP) for its waste handling. The key goals for DSNY’s SWMP for 2006-2025 included:

• Increase recycling and build a recycling processing facility in Brooklyn;
• End long-haul trucking and maximize exporting waste out of state via rail and barge;
• Develop containerized facilities for DSNY-managed waste in each borough;
• Stabilize costs through 20-year contracts; and
• Evaluate and build pilot plants for alternative municipal solid waste (MSW) technologies.

“It has taken us some time, but we are going through the final throes of implementation now,” said Raila.

Regarding the evaluation of alternative technologies for municipal solid waste, the proposed technology needed to meet certain criteria, including that it could not be conventional mass-burn WTE or refuse-derived fuel combustion. The requirements for a reference facility included that it have a minimum processing capacity of 20 tons per day and that the preferred feedstock be MSW.

HDR is assisting the evaluation committee. DSNY is currently in negotiations with two different vendors, reported Dolinar. She did not identify the companies but said that one of the proposals is for anaerobic digestion (AD) and the other is for gasification.

WasteCon 2013 was Sept. 17-19 at the Long Beach Convention Center in Long Beach.
 

As of mid-September, paper stock markets appear to be in fairly decent shape. Prices for most grades of recovered fiber have improved a bit, domestic mills are placing larger orders and offshore buying from most sources, including China, has picked up.

The positive outlook has been fueled by new capacity that has come online in North America. Atlantic Packaging Products recently reopened its Whitby, Ontario, mill, which originally produced newsprint. The mill closed in light of soft demand for its finished product. However, following a technology upgrade enabling the plant to produce recycled paperboard products such as linerboard, the mill has reopened and has begun ramping up production.

One source says that while the Whitby mill has gone through some “fits and starts,” when it is running at full capacity, it will be producing roughly 1,100 metric tons of recycled paperboard per day. The mill is expected to need a significant amount of OCC (old corrugated containers) that it will likely source from throughout the Northeast, sources say.

The new capacity will be joining several other consumers in the area, including RockTenn’s Solvay Paper mill in the Syracuse, N.Y., area, which also consumes OCC.

With all the new capacity coming online that consumes OCC, some vendors say they are concerned about finding enough material to respond to demand. “I don’t know where the supply to feed these mills will come from,” one paper stock dealer says.

Another source adds, “Markets are healthy. We are not turning loads away. Our order books are good. There is very good demand for OCC.”

In a traditional market, following a slowdown during the summer, mills ramp up for end-of-year business. However, this year’s ramp-up has been far less than expected so far, according to sources. As a result, some dealers say they are less certain that markets will continue to strengthen through the rest of the year.

However, overseas developments appear promising. There has been an uptick in purchases from Chinese mill buyers. One exporter says Operation Green Fence has eased as of late, which is helping to redirect some bulk grade shipments to China.

While the implementation of Operation Green Fence had a significant impact on paper stock shipments to China, it also resulted in a number of domestic mills tightening their own standards. Because of the higher standards on the part of consumers, a number of paper mills have become more vigilant regarding the material they accept. One West Coast source says a number of mills in the Northwest, including those operated by Longview Fibre and International Paper, have reduced their purchases of single-stream material.

Several sources say some Chinese buyers also are avoiding material recovered from single-stream operations.

Old newspapers (ONP) have seen a rebirth recently. One exporter says that after reducing its ONP intake for several months, China needs the material and buyers are willing to pay as much as $10 more per ton than they paid in August.

The printing paper market also has seen an improvement. A paper stock dealer in the Midwest says some of his printer customers are seeing business pick up.

Although several sources say printers have been running at a better clip recently, longer-term challenges remain within the printing and writing sector. For instance, in early September, International Paper announced plans to permanently close its Courtland, Ala., paper mill, which produces approximately 1 million tons of printing and writing paper per year. The company says it expects to shutter the mill by the first quarter of 2014.

Another potential concern for paper stock companies dealing in high grades is the trend by some mills to increase their pulp consumption at the expense of recovered fiber. One source says some mills still find quality to be a concern and therefeore are blending in more pulp with their recovered fiber as a result.

The high-grade paper market also is seeing modest softening in the Southwest and Midwest. One source says Mexican mills, which traditionally purchase significant amounts of white ledger and high grades, are cutting back new purchases. “Mexican mills are a bit full right now,” one broker says.

While China has come back into the market in a stronger way, India, which purchases ONP and some other paper stock grades from the United States, is a source of concern as its currency weakens. The declining value of India’s currency makes it more expensive for consumers in that country to import material, ultimately reducing overall imports of commodities such as recovered fiber.