Domestic Paper Stock Consumption Continues Decline

The domestic consumption of recovered fiber continues to decline, with figures for the first three months down 2.4 percent from figures the same time last year.

According to the American Forest and Paper Association, consumption for March stands at 2.9 million tons, a slight decrease from last March’s figure of 2.955 million tons. For the first three months domestic paper stock use stands at 8.322 million tons, compared to last year’s three-month total of 8.525 million tons.

Along with consumption patterns that are declining, the inventory of recovered fiber at domestic mills is following suit with sharp declines. At the end of March the inventory level stands at 982 million tons, a 4.5 percent drop from figures the previous month. While a sharp drop from the previous month, March’s inventory level is an improvement of 3.7 percent from last March’s inventory level.

While the domestic paper industry continues to struggle, a saving grace for the paper recycling industry has been the surging export market. While a host of exporters have been singing about the improved condition for offshore shipments, the most recent figures from the U.S. Commerce Department hammer this point home.

For February, the most recently reported month, exports stand at 1.122 million tons, a 31.5 percent jump in shipments compared to figures the same time last year. The surge in exports is most closely attributed to the increased demand by Chinese interests, although there are reports of other regions of the world purchasing larger amounts of recovered fiber.

Canada, still the largest importer of recovered fiber from the United States, saw its imports of recovered fiber from the United States climb by 14.6 percent for the month to slightly less than 200,000 tons.

While the strong growth has helped many paper stock dealers ride out the rough markets on the domestic side, there are creeping concerns that the booming markets, especially to China, could be hit by problems not limited to the paper industry. Several vendors recently have been noting that the SARS scare in China is having a direct impact on the economy in China. One source notes that several of the larger paper machines have gone offline due to a decrease in demand for the finished product.