The domestic consumption of recovered fiber declined over the first two months as mills continue to tighten inventories and produce less material.
According to recent figures from the American Forest and Paper Association, consumption for February stands at 2.594 million tons, a steep drop from last February’s consumption total of 2.945 million tons. The decline for the month pushed the two month total to 5.435 million tons, a 2.4 percent decline from figures the same time last year.
The large decline can be partly traced to continued shutdowns at a host of machines throughout the United States. As paper and paperboard companies grapple with sluggish demands, the consumption of recovered fiber continues to slip.
Along with the decline in consumption, the inventory of recovered fiber at domestic mills declined in comparison to figures during the same time in 2002. According to the AFPA, at the end of February, the inventory of recovered fiber stands at 1.021 million tons, a 9.2 percent drop from inventory levels the previous month, as well as a 1.4 percent drop from the same time last year.
While the difficult situation with domestic mills puts undue pressure on the paper stock industry, the continued saving grace for the U.S. paper stock industry has been the growth in exports. Over the past several months shipments to Asia, primarily China, have led to better pricing and pressure on the part of domestic mills to raise their prices for recovered fiber.
January figures from the U.S. Commerce Department show exports for January standing at slightly more than 1.2 million tons, a steep 28 percent jump from figures the same time last year. The jump, many exporters feel, will likely hold up for the next several months at least as many of the paper companies in China continue to seek out additional tonnage to build inventory in anticipation of new production capacity coming on line later this year.