<B>Paper Stock Consumption Sees Sharp Drop First Seven Months</B>

Strong growth in the domestic consumption of recovered fiber is coming to a halt, according to recent figures from the American Forest and Paper Association. Figures from the association have consumption for July at 2.851 million tons, a slight dip from the previous month, as well as a much sharper decline from figures the same time last year.

Furthermore, the consumption of recovered fiber over the first seven months of the year, slightly less than 21 million tons, is down 4.5 percent from figures during the same time last year.

A double whammy for the hard hit paper stock industry has been the ability of many paper and paperboard mills to slash inventory levels. At the end of July the inventory of recovered fiber stands at slightly more than 1 million tons, a 4 percent drop from the previous month, as well as a 2.4 percent decline from figures the same time last year.

There are a number of factors for the continued decrease in inventory levels. For one, more paper and paperboard mills are opting to carry far less raw material on hand as a step to free up more capital. There also are a host of reports that despite ample downtime by many mills, especially paperboard mills, these facilities are allowing inventories to dwindle, making it even more difficult to move material.