The consumption of recovered fiber dipped by 4.3 percent for the first two months of this year, compared to figures the same time last year. According to the American Forest and Paper Association, consumption of recovered fiber for February stands at 2.63 million tons, compared to last February’s figure of 2.832 million tons.
The figures for the month pushed the two-month consumption total to 5.585 million tons. The total consumption of recovered fiber the same time last year stands at 5.835 million tons.
The slip in recovered fiber follows an overall downward trend in the domestic paper market. Total paper production declined by 7.8 percent over the first two months. The AFPA reports that total paper production over the first three months of the year stands at 10.118 million tons.
The biggest loser for the year so far continues to be newsprint. Over the first three months newsprint production plummeted by more than 18 percent. As prices for finished newsprint declined, newsprint producers continued to cut production capacity to bring supply and demand back into balance.
While consumption declined, a promising note has been the steady decline in the inventory of recovered fiber at domestic mills. At the end of February, the inventory stands at 1.019 million tons, compared to the inventory at the end of January standing at 1.089 million tons and the inventory level at the end of December, which stands at 1.105 million tons.
While figures the first two months points to a still listless market, over the past two months shows a more substantial improvement in market. The key driver continues to be old corrugated containers, which has been surging during March, April, and so far this month.
This trend continues to be driven by stronger than expected offshore orders. Demand from Asian buyers has been strong. The swing to better orders is soaking up most of the material. The result has been a number of domestic mills having to hike their prices to guarantee an adequate supply of material.