The paper stock market in the United States is showing significant differences in behavior. Over the past several months domestic mills have been reporting declines in consumption of recovered fiber. This swing is reflected in monthly statistics showing domestic recycled board production and paper stock consumption declining compared to figures last year.
The declines have been caused by a number of mills that have shuttered, as well as sluggish markets for a number of grades, especially the newsprint industry.
However, while domestic markets continue to be a problem area, the export market is showing strong growth. Again, recent figures show overall exports of recovered fiber booming.
According to the American Forest and Paper Association, the consumption of recovered fiber at domestic mills stands at 2.745 million tons, bringing the year to date total to 11.074 million tons, a 3.1 percent decline from figures the same time last year.
Along with the four-month consumption figure being down, comparisons between last April and this April are equally troublesome. The April consumption total is down sharply from last April’s figure of 2.904 million tons.
While domestic markets are less than sterling, exports are booming. According to the U.S. Commerce Department, the exports for March stand at 1.256 million tons, pushing the annual rate, year to date, to 14.321 million tons. For the first three months of the year exports are up by 33 percent.
While Canada continues to increase its intake of recovered fiber from the United States, the key driver is China. This region continues to generate a tremendous amount of interest as the country continues to buy significant blocks of recovered fiber from throughout the U.S. to feed its domestic demands.
A positive sign for the domestic market is the growing levels of recovered fiber inventory. Over the past several quarters domestic mills have cut their inventory levels. This generated sizable problems for many domestic paper stock dealers. However, as Chinese interests have entered the market in even greater numbers, bidding up prices for many grades, some domestic mills have been looking to again build up inventories.
At the end of April recovered paper inventories at domestic mills climbed to 1.048 million tons, a 7.4 percent increase from the previous month. Additionally, the inventory level for the end of April is a 13.1 percent increase from figures last April’s figures.