OCEAN WATCHING
Recent figures from the American Forest and Paper Association (AFPA), Washington, highlight the differing directions of the domestic and offshore markets for recovered fiber. While domestic mills continue to struggle with soft demand, the offshore market continues to surge, helping keep prices for many grades of recovered fiber at steady levels.
According to the AFPA, the consumption of recovered fiber for May was 2.9 million tons, a decline from last May’s consumption figure of slightly more than 3 million tons. The figure for the month pushed the five-month total to 13.98 million tons, a 3.2 percent drop compared to the same time span last year.
While the domestic market continues to take capacity off line, offshore orders are climbing sharply. For April, the most recently reported month, exports totaled 1.14 million tons, close to a 28 percent increase from the figure for April of 2002.
The strength in offshore orders continues unabated, with movement to many of the end markets climbing. Canada, until very recently the largest importer of U.S. paper stock, posted a 15.6 percent increase in recovered fiber from the U.S. China, the new import leader, continues to play the most active role in shipments of recovered fiber.
Chinese buyers are expected to continue purchasing large blocks of material as new plant capacity comes on line.
With domestic paper stock use continuing to slump, the inventory of recovered fiber has been climbing higher. Despite a shortage of orders for finished products, many mills are still having to pay more for material as they face increased competition from buyers outside North America.
The recent AFPA figures show that inventory levels of recovered fiber at the end of May stand at 1.05 million tons, a 19 percent increase from inventory levels the same time last year. Further, the increase for May is up close to 1 percent from figures during April.
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