List: North America's largest recovered paper consumers

Features - Paper Recycling Supplement

North American paper mills continue to absorb a large volume of the scrap paper generated in the U.S.

January 6, 2022

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When the People’s Republic of China began restricting and then essentially banned North American recovered fiber from its ports, the fundamentals underpinning scrap paper demand and pricing were thrown into question in the minds of many observers.

With the books nearly closed on 2021—a year when China played no direct role in the global recovered paper market—demand for North America’s scrap paper held steady and prices stayed lofty, even in the face of pandemic-related economic turbulence.

American baled scrap paper continues to find homes overseas, but demand from mills in the United States, Canada and Mexico plays the lead role in ensuring discarded old corrugated containers (OCC), mixed paper, sorted residential papers and news (SRPN) and other widely traded grades retain their value as circular commodities.

A proven model

In the three years between this edition’s list of North America’s Largest Recovered Paper Consumers and the previous one in December 2018, only a few names in the roster of companies have changed.

Stability has been a hallmark of the sector despite trade wars, a pandemic and supply chain disruptions. Producers of containerboard and other packaging grades, including, Cascades, Georgia-Pacific (GP), International Paper (IP) and WestRock remain among the largest consumers of scrap paper in North America.

The corrugated cardboard box, though an “old school” form of packaging by some measures, has not fallen out of favor. Rather, thanks in part to its ability to provide a circular model in a sustainability-focused era, demand for boxes has kept board mills running at nearly full capacity this decade.

Change at times, however, has been frequently in the form of consolidation. An “investor roadshow” slide prepared by IP this October provides a breakdown of what that change has looked like in the past 25 years.

IP reports that in 1995, the former Stone Container Corp., with 13 percent market share, had the largest piece of the U.S. containerboard pie, followed by GP, which had 9 percent, and four companies (including IP) that were tied with 7 percent. The “others” category enjoyed a full 50 percent of the market among them.

In 2021, IP says, the “others” are down to just 24 percent market share, while the two largest companies have a combined 51 percent of the market (IP with 31 percent and WestRock with 21 percent). GP has retained its 9 percent market share, according to the IP chart, while Packaging Corp. of America (PCA) has built a 10 percent share. Newcomer Pratt Industries now has 5 percent of the market.

Despite the considerable scale of IP and WestRock, many of the other players in the market seem disinclined to allow the two companies to dominate.

Investments in new containerboard and other packaging grade capacity have been announced regularly in the three years since our previous edition of this list. With the enormous buying of China seemingly in the rearview mirror for good, paper and board producers have stepped in to fill the breach.

No market? No problem

When board producers and recovered fiber suppliers gathered in Shenzhen, China, in late 2018 for a RISI International Recycled Fiber and Containerboard Conference, conversations often centered on what would become of global fiber demand in the near-term future, with mixed paper considered particularly problematic.

At least one conference participant expressed confidence that global markets, and America’s in particular, would navigate through the upcoming turbulence.

Rahul Kejriwal of New York-based Go Green/Kejriwal said that while media coverage had portrayed America as the loser in China’s scrap restrictions, he disagreed with that viewpoint and with concerns about single-stream sorting systems in the U.S. “I think American single-stream is here for good,” he said.

“China is going away as a market in two years. In that time, new capacity in North America and Europe will absorb this fiber—even mixed paper,” Kejriwal continued. “America will innovate, research and make adjustments to handle that fiber. They will not change their system to make China happy or to make India happy.”

Three years later, Kejriwal’s words seem largely prophetic. At the same conference, he expressed optimism about adding such new capacity himself; but, in the meantime, larger, established paper and board producers stepped into the breach instead.

Mixed paper, portrayed by some recycling advocates as doomed for a future at the landfill, instead is now sought by mills that have reconfigured their stock prep systems or installed paper machines to gain access to the recovered fiber prepared at North American material recovery facilities (MRFs).

GP developed its Juno Technology, deployed in Toledo, Oregon, specifically to prepare mixed materials to procure fiber that is being used to make linerboard for corrugated boxes.

In Wisconsin, Green Bay Packaging (GBP) installed a new paper machine designed in part to allow it to access mixed paper produced at single-stream MRFs. The mill’s “recycled fiber line is well-designed to handle higher contaminant loads associated with mixed paper—even material recovery facility OCC tons, frankly,” GBP Vice President Matt Szymanski told Recycling Today this summer.

“We didn’t have the capability of running a significant amount of mixed in the old mill,” Szymanski added. “We believe in having as much flexibility as we can in our operations—we built in flexibility for raw material supply.”

GP and GBP have been far from alone in making such investments. This spring, Longview, Washington-based North Pacific Paper Co. took delivery of a new drum pulper designed to handle mixed paper and “take advantage of current wastepaper supplies,” according to the company. Canada-based Domtar, meanwhile, is entering the packaging sector with a recycled-content board mill in Kingsport, Tennessee.

Previous concerns to the contrary, speculating the demise of the American paper recycling sector seems to have been premature and unfounded.

The author is the senior editor with the Recycling Today Media Group and can be contacted at