Recently gathered statistics as well as forecasts for future activity point to increased consumption of U.S. scrap paper by Chinese and other Asian mills.
Both an American Forest & Paper Association study last year and data collected by Moore & Associates, a paper recycling consulting firm based in Atlanta, indicate that there will be increased export demand over the next five years. Even though North American mills may have restrained appetites, the foreign demand could help sustain scrap paper pricing.
“While U.S. domestic demand does not show any significant growth going forward, export demand growth—coupled with supply constraints—could lead to very volatile recovered paper prices in the future,” says Moore & Associates president William P. Moore.
According to Moore, there are also two problems emerging in the supply of recovered paper: North American residential and commercial recovery programs have shown no new growth over the last several years and, going forward, little new activity is expected.
Moore & Associates forecasts that further consolidation of the recovered paper processing infrastructure could also lead to marketplace imbalances.
The firm’s study has determined that mill companies need to take a more proactive role in the generation of new supply of recovered paper in order to offset increased costs caused by export demand and the supply constraints that face the marketplace.
The Atlanta firm has also conducted its seventh annual round of recovered paper price benchmarking surveys. “These were our most successful surveys based on the number of participants. They are important profit management tools for the paper recycling industry, capturing over 60% of all of the North American usage of recovered paper,” says Moore.
The surveys cover recovered paper prices paid by the paperboard, newsprint and tissue/printing and writing grade sectors. “They are the only real measurement available to a mill company to assess the effectiveness of its recovered paper procurement,” says Moore.
The surveys include reporting delivered pricing (in addition to FOB), weight averaging price by amount of usage, and producing an aggregate market price (including spot as well as contract tonnage).
Further information on Moore & Associates’ reports can be found at its Website at www.MARecycle.com.