<B>Paper Stock Consumption Dropping</B>

The consumption of recovered fiber at domestic paper and paperboard mills slipped for June compared to last June. The American Forest and Paper Association reported paper stock use at 2.939 million tons, a 3.9 percent drop from the same time last year.

The consumption total for the month brought the six-month total to 18.078 million tons, compared to last year's six-month total of 18.804 million tons.

The figures confirm what many paper stock dealers have been reporting: Many paper and paperboard mills are seeing steep increases in finished product, resulting in more downtime and a sharp drop in the new paper stock being purchased.

The inventory of recovered paper at mills at the end of May, the most recently reported month, increased by 8.9 percent from figures the same time last year. At the end of May 1.030 million tons of recovered fiber were inventoried, a 1- percent increase from the previous month, as well as the steeper jump from last June.

Although recovered fiber saw inventories climb, other forest group products were able to continue bringing their inventory levels down. Producers market pulp inventories dropped 1 percent at the end of May from the previous month, as well as declined by 8 percent from figures the same time last year; newsprint inventories, although increasing 3 percent from April to May, declined by more than 50 percent from figures the same time last year.

Linerboard inventories also dropped. At the end of May linerboard inventories stand at 240,000 tons, a 2.6 percent decline from the previous month, as well as a 12.6 percent drop from last May.